Tuesday Closing Livestock Market Update - Pork Cuts, Boxed Beef Prices Tip Lower

GENERAL COMMENTS:

It was a split day for the marketplace as cattle futures closed mostly lower, but the lean hog market continued to demand support and kept trading higher. A California judge ruled that Prop 12 enforcement should be halted on sales of pork, which helped boost the lean hog market's spirits and aided in the higher close. Hog prices closed higher on the National Direct Afternoon Hog Report, up $6.44 with a weighted average of $72.13 on 9,755 head. March corn is down 1 cent per bushel and March soybean meal is down $1.90. The Dow Jones Industrial Average is down 66.77 points and NASDAQ is down 315.83 points.

LIVE CATTLE:

I was rooting for the cash cattle market to wait to trade until at least Wednesday, but some early trade broke loose and both live and dressed cattle traded steady with last week's market. Southern live deals were marked at $137 and Northern dressed cattle were sold at $218, both fully steady with last week's market. Tuesday's trade was only a light sampling, so come Wednesday the market fully expects more cattle to trade. It's likely Wednesday will see cattle trade for steady prices as the futures market isn't granting the complex any supportive favors. Also, with boxed beef prices cooling off, the market will likely trade steady. February live cattle closed $0.77 higher at $137.10, April live cattle closed $0.02 higher at $140.10 and June live cattle closed $0.15 lower at $135.42. 

The market did see a positive step made in terms of processing speeds as Tuesday's slaughter is estimated at 118,000 head. The more progress that can be made on throughput the better as feedlots are starting to grow wary about currentness. Tuesday's slaughter is estimated at 118,000 head -- 1,000 head more than a week and year ago.

Boxed beef prices closed lower: choice down $1.12 ($292.38) and select down $1.47 ($283.32) with a movement of 143 loads (95.70 loads of choice, 13.58 loads of select, 13.38 loads of trim and 20.32 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: Steady. Given that cattle have sold in both the North and the South, prices will likely trend steady with the week's tone.

FEEDER CATTLE:

The corn market closed higher, but the deferred contracts walked away with the bigger gains and nearby contracts traded only $0.01 to $0.03 higher. Still, the jump in corn prices and the weaker undertones in the cattle market all aided in the feeder cattle contracts demise by Tuesday's close. March feeders closed $1.40 lower at $159.85, April feeders closed $1.10 lower at $165.27 and May feeders closed $1.12 lower at $169.20. It's unlikely the feeder cattle market will see much support from either the technical or fundamental side of the market as external influences remain unfriendly to the market's success. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week on a run of 12,274 head, feeder steers and heifers traded $3.00 to $5.00 lower. Steer calves traded unevenly steady and heifer calves traded $3.00 to $5.00 lower. Continued cold and dry conditions across the region have many of the cattle coming to the market in thin condition. The CME Feeder Cattle Index 1/24/2022: down $0.69, $159.77.

LEAN HOGS:

The lean hog market continued its upward climb Tuesday on continued support in the cash hog market and a California court halted the enforcement of Prop 12, which moves back the enforcement of the law by six months once the rules are finalized. The Supreme Court's next conference is scheduled for Feb. 18. The entire lean hog complex rallied throughout Tuesday, but it wasn't only the deferred contracts that saw immense support, but also the nearby contracts. February lean hogs closed $1.12 higher at $87.45, April lean hogs closed $1.92 higher at $97.25 and June lean hogs closed $0.62 higher $106.57. Pork cutouts totaled 347.08 loads with 311.70 loads of pork cuts and 35.39 loads of trim. Pork cutout values: down $3.20, $92.46. Tuesday's slaughter is estimated at 476,000 head -- 8,000 head more than a week ago and 27,000 head more than a year ago. Monday's hog slaughter was revised to 448,000 head -- which is 7,000 head less than what was originally stated. The CME Lean Hog Index 1/21/2022: up $0.81, $78.32.

WEDNESDAY'S CASH HOG CALL: Higher. With the findings on the Prop 12 legislation, the cash market could see more interest in Wednesday's market as packers look to procure all the hogs the market can stomach.