GENERAL COMMENTS:
The cattle complex is struggling to cling to the market's higher boxed beef prices and the lower trend in corn prices, but the weaker tone throughout the futures market and the lower cash cattle trade are pushing the complex lower and lower. Meanwhile the lean hog market has shaken the blues of earlier this week and is rallying modestly into the afternoon. March corn is down 3 1/4 cents per bushel and March soybean meal is down $0.30. The Dow Jones Industrial Average is up 38.86 points and NASDAQ is up 38.72 points.
LIVE CATTLE:
First the futures market opened lower, which blanketed the cattle complex with bearish emotions. Then the cash cattle market started to see some $2.00 lower trade in the North, which really sent the market into a growly mood. February live cattle are down $0.60 at $137.07, April live cattle are down $0.30 at $140.90 and June live cattle are down $0.27 at $136.27. There's been just a thin development of trade in the North on Wednesday morning and packers are cashing in on the market's weaker tone. Cattle traded in the North for $218 -- $2.00 lower than a week ago -- and cattle traded live in the North at $138 is roughly steady with a week ago; but the cattle are set for delivery for the weeks of Jan. 24 and Jan. 31. This does not come as good news for the cash cattle market in the weeks ahead. Some cash cattle trade has also been noted in Colorado at $137 and in Iowa at $138, both on extremely light tests. Asking prices in the South are firm at $138 and the North is asking $222-plus. Tuesday, the South managed to trade cattle for $136 to $137, which is steady to $1.00 lower than last week's business.
The Fed Cattle Exchange Auction listed a total of 3,056 head, of which 379 actually sold, 64 were scratched from the auction and 2,613 head were listed as unsold, as they did not meet the reserve prices, which ranged from $127 to $138. Opening prices ranged from $125 to $135, high bids ranged from $129 to $137. The state-by-state breakdown looks like this: Texas 1,471 total head, with 345 head sold at $137.00, and 1,126 head went unsold; Kansas 1,312 total head, of which none actually sold, 1,248 head went unsold and 64 were scratched from the auction; Oklahoma 197 total head, all of which went unsold. California 76 total head, with 34 head sold at $129.00, but 42 head went unsold.
Boxed beef prices are higher: choice up $1.05 ($279.27) and select up $1.82 ($270.45) with a movement of 84 loads (45.72 loads of choice, 10.57 loads of select, 13.41 loads of trim and 14.05 loads of ground beef).
FEEDER CATTLE:
As the corn market jumps around and as the live cattle contracts neglect to summon any substantial technical support, the feeder cattle contracts are trading mostly lower. January feeders are down $0.20 at $161.87, March feeders are down $0.77 at $165.57 and April feeders are down $0.65 at $169.47. The feeder cattle contracts are caught again, chopping sideways as the market faces downward pressure technically. But the market can't help but to be excited about the demand that continues to support the market in the countryside. Even though large receipts have saturated sale barns this week, the market has had plenty of buyers and prices have stayed relatively strong.
LEAN HOGS:
Even though Wednesday's WASDE report wasn't overly friendly to the lean hog market, the market is shaking the report off and focusing on the positive momentum of Wednesday. February lean hogs are up $0.97 at $78.82, April lean hogs are up $0.75 at $84.95 and June lean hogs are up $0.95 at $97.22. With the futures market rallying, cash prices higher and midday pork cutout values elevated, the market is feeling optimistic for the time being. Again, more than anything really, pork producers hope to see stronger chain speeds by the day's end.
The projected CME Lean Hog Index for 1/11/2022 is down $0.07 at $75.06, and the actual index for 1/10/2022 is up $0.43 at $75.13. Hog prices higher on the National Direct Morning Hog Report, up $0.48 with a weighted average of $64.75, ranging from $62.00 to $69.00 on 4,351 head and moving the five-day rolling average to $66.27. Pork cutouts total 178.91 loads with 156.02 loads of pork cuts and 22.89 loads of trim. Pork cutout values: up $5.40.
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