GENERAL COMMENTS:
Cattle futures are finally seeing some support from traders after a tough start to the week. Meanwhile, after an exhilarating day of trade , Tuesday, the lean hog complex is chopping sideways. March corn is up 3/4 cent per bushel and March soybean meal is up $7.70. The Dow Jones Industrial Average is up 363.84 points and NASDAQ is up 329.68 points.
LIVE CATTLE:
Boxed beef prices are pulling back for the second day in a row, which points to the conclusion that boxes are topping. As packers take note of the boxed beef market, they've also cut into the cash market and been able to buy cattle in Kansas for $136, which is $1.00 lower than Tuesday's trade and $1.00 lower than last week's average. Throughout the week Southern live cattle have traded at mostly $137 and Northern dressed trade has taken place at $218. While it's frustrating to see the lower trend in the cash market, hopefully the support that's building in Wednesday's futures complex keeps the market from dipping much lower. February live cattle are up $0.90 at $138.00, April live cattle are up $1.70 at $141.80 and June live cattle are up $1.47 at $136.90. It's likely boxes will indeed close lower by the afternoon, which will be important to monitor. But equally as important is noting how the day's slaughter performs. The pullback in boxes is normal for this time of year.
The Fed Cattle Exchange Auction listed a total of 2,904 head (Texas 1,438 head, Kansas 987 head, Iowa 203 head, Nebraska 120 head, Oklahoma 121 head, California 35 head), all of which went unsold, as they did not meet the reserve prices, which ranged from $130 to $138.50. Opening prices ranged from $125 to $136.50, high bids ranged from $130 to $138.50. Another auction is scheduled for Thursday.
Boxed beef prices are lower: choice down $0.88 ($291.50) and select down $1.23 ($282.09) with a movement of 73 loads (44.99 loads of choice, 8.59 loads of select, 5.03 loads of trim and 14.35 loads of ground beef).
FEEDER CATTLE:
After dropping below the 100-day moving average in the March contract, the feeder cattle contract seems to be finding support. Even though the corn market is posting a mild rally, the entire feeder cattle complex is trading higher. March feeders are up $1.05 at $160.90, April feeders are up $0.80 at $166.00 and May feeders are up $0.62 at $169.82. It's helping that the live cattle market is also trading confidently into Wednesday afternoon. And even though the cash cattle market is only trading steady with last week, it does come as a sigh of relief to see processing speeds inching higher to 118,000 head.
LEAN HOGS:
After an exciting rally earlier in the week, the lean hog complex is chopping sideways through Wednesday's trade. February lean hogs are down $0.45 at $87.00, April lean hogs are down $0.92 at $96.30 and June lean hogs are down $0.15 at $106.42. After an exhilarating day of stronger trade and then hearing the news that Prop 12 rules won't be enforced until six months after the rules are finalized, the lean hog market seems to be coasting through Wednesday and catching its breath.
The projected CME Lean Hog Index for 1/25/2022 is up $0.75 at $79.20 and the actual index for 1/24/2022 is up $0.13 at $78.45. Hog prices are higher on the National Direct Morning Hog Report, up $1.56 with a weighted average of $62.81, ranging from $61.00 to $77.00 on 2,765 head and a five-day rolling average of $61.48. Pork cutouts total 177.85 loads with 164.18 loads of pork cuts and 13.67 loads of trim. Pork cutout values: up $3.42, $95.88.
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