GENERAL COMMENTS:
Tuesday's market has slowly skated its way into trading, but heading into the afternoon the market is anxious to see where the day's slaughter levels end up. There's been a little interest in the cash market in the South, but the North has yet to trade. March corn is up 1/2 cent per bushel and March soybean meal is down $3.30. The Dow Jones Industrial Average is up 12.41 points and NASDAQ is up 137.76 points.
LIVE CATTLE:
Part of what could be driving the live cattle futures higher is that Tuesday's slaughter is anticipated to be right at 115,000 head, which is 2,000 head more than Monday's slaughter. With processing speeds being one of the market's biggest concerns right now, a positive upswing of 2,000 head is market-worthy news. February live cattle are up $1.42 at $137.67, April live cattle are up $0.75 at $141.32 and June live cattle are up $0.60 at $136.82. It's important that we not overlook the rally which is developing in boxed beef prices. Both choice and select cuts are gaining traction, which will only incentivize packers to get processing speeds up to par sooner rather than later as there's money to be made. There's some early cash cattle trade developing in the South at $137, which is steady with Kansas's weighted average last week but about $1.00 lower than what Texas traded at. There are a few scattered bids offered in the North at $137 but no one has jumped on those offerings yet. Asking prices range from $138 to $140 in the South and $222-plus in the North. If feedlots can wait until Wednesday or later to trade, they stand a stronger chance at getting closer to their asking prices.
Boxed beef prices are higher: choice up $1.76 ($277.80) and select up $1.96 ($268.46) with a movement of 84 loads (44.29 loads of choice, 10.25 loads of select, 5.22 loads of trim and 24.00 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures are feeling somewhat more confident in their aspirations to trade higher, given that the live cattle market is posting a rally. But with the corn market teetering back and forth on whether or not to rise, the feeder contracts are carefully eyeing the corn market's developments. January feeders are up $0.77 at $161.70, March feeders are up $0.45 at $165.82 and April feeders are up $0.22 at $169.67. Receipts have been hefty throughout the countryside this week and even though the market is juggling two big variables (high-priced corn and questionable processing speeds), all-in-all demand has remained strong.
LEAN HOGS:
Lean hog futures are trading mixed heading into Tuesday afternoon. The nearby contracts are leery about joining the deferred contracts in a full-out rally, but the market, overall, has grown stronger throughout the day. February lean hogs are down $0.62 at $77.75, April lean hogs are down $0.25 at $84.50 and June lean hogs are up $0.10 at $96.60. Tuesday's slaughter is estimated to be around 465,000 head, which is 8,000 head more than what was processed on Monday. If packers can successfully pull off processing 8,000 head more, that bodes well for the market's tone.
The projected CME Lean Hog Index for 1/10/2022 is up $0.43 at $75.13, and the actual index for 1/7/2022 is up $0.97 at $74.70. Hog prices are lower on the National Direct Morning Hog Report, down $1.58 with a weighted average of $64.27, ranging from $62.00 to $70.00 on 3,411 head and the five-day rolling average has moved to $66.76. Pork cutouts total 173.91 loads with 160.66 loads of pork cuts and 13.25 loads of trim. Pork cutout values: up $0.04, $86.46.
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