GENERAL COMMENTS:
It was a technically supportive day for the cattle contracts, but the cash side of the market dipped lower as packers pushed cash prices down $1.00 from Tuesday's trade. After an aggressive week, the lean hog complex is looking for follow-through support, which could come from Thursday's export numbers. Hog prices closed lower on the National Direct Afternoon Hog Report, down $3.84 with a weighted average of $68.29 on 4,631 head. March corn is up 7 cents per bushel and March soybean meal is up $8.50. The Dow Jones Industrial Average is down 129.64 points and NASDAQ is up 2.82 points.
LIVE CATTLE:While it was refreshing to see stronger trade in the futures, cash trade through the countryside did not improve. February live cattle closed $0.95 higher at $138.05, April live cattle closed $1.80 higher at $141.90 and June live cattle closed $1.62 higher at $137.05. After dancing around the 100-day moving average in both the February and April live cattle contracts, Wednesday's support helped create some distance from the market's moving average and pushed prices higher. The problem with Wednesday's trade is that, with boxed beef prices seasonally topping, cash prices are seeing pushback. Southern live deals were marked at $136 to $138, mostly at $136 to $137, which is steady to $1.00 lower than Tuesday. Northern dressed trade was marked at $218, which is fully steady. Trade volumes for the week remain light, so some more clean-up trade could develop. But with packers having cattle committed with time and running slower chain speeds, they may not need that many.
Wednesday's slaughter is estimated at 118,000 head -- 3,000 head more than a week ago and 2,000 head less than a year ago.
Boxed beef prices closed lower: choice down $2.92 ($289.46) and select down $3.60 ($279.72) with a movement of 132 loads (88.67 loads of choice, 15.03 loads of select, 5.03 loads of trim and 22.87 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady with the week's trend. Seeing that packers bought cattle and worked the market $1.00 lower Wednesday, it's likely any more buying will be simply steady with the week's trend.
FEEDER CATTLE:Despite the corn market closing higher, the feeder cattle contracts rallied through Wednesday's close. March feeders closed $0.95 higher at $160.80, April feeders closed $0.92 higher at $166.20 and May feeders closed $0.92 higher at $170.12. Even though the feeder cattle market doesn't like how high corn prices have gotten, the market was encouraged to see the live cattle contracts trading higher and throughput picking up speed. The latter half of the 2022 live cattle market offers a nice premium when compared to today's live cattle market and feeders are looking at this market and continue to be bullish as they believe the market's fundamentals of fewer cattle amid excellent demand will lead prices to higher planes. At Bassett Livestock Auction in Bassett, Nebraska, compared to last week on a run of 4,500 head, steers weighing 550 pounds traded $10.00 higher and steers weighing 650 to 700 pounds traded $2.00 to $4.00 stronger. Heifer offerings weighing 450 to 500 pounds traded $8.00 to $9.00 higher and heifers weighing 550 to 650 pounds traded steady. The CME Feeder Cattle Index 1/25/2022: down $0.27, 159.50.
LEAN HOGS:If you're one who struggles with restless nights, unable to shut your mind down, DON'T begin to look at the current lean hog market. The market rallied aggressively Tuesday as technical pushed prices higher and upon hearing that Prop 12 won't be enforced until six months after the rules are finalized. But come Wednesday, the complex seemed to cool down and merely catch its breath. The futures market closed mixed, pork cutouts closed higher, and the cash market closed lower -- so all-in-all the market chopped sideways. What's extremely odd is the spread in cash hog prices. Did you see the $21 spread from the highest offer to the lowest offer? Pork cutouts totaled 313.72 loads with 283.10 loads of pork cuts and 30.62 loads of trim. Pork cutout values: up $2.14, $94.60. Wednesday's slaughter is estimated at 475,000 head -- 18,000 head more than a week ago and 18,000 head less than a year ago. Tuesday's hog slaughter was revised to 471,000 head -- 5,000 head less than what was originally stated. The CME Lean Hog Index 1/24/2022: up $0.13, $78.45.
THURSDAY'S CASH HOG CALL: Steady. With that wide $21 spread in the cash market, it's likely one of the ends tightens up and narrows the price spread. But with processing speeds lagging, it is unlikely prices see much more upward potential until throughput improves.
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