Monday Closing Livestock Market Update - Contracts Not Comfortable With the Unknown

GENERAL COMMENTS:

The livestock complex traded sheepishly Monday as the complex isn't comfortable with the world's uncertainty. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.62 with a weighted average of $89.40 on 4,163 head. May corn is up 35 cents per bushel and May soybean meal is up $3.60. The Dow Jones Industrial Average is down 166.15 points and NASDAQ is up 56.78 points.

LIVE CATTLE:

Live cattle futures kept their downward path as the market traded uneasily with the pressures of global uncertainty looming. This comes as a big frustration to feedlots because the market's weaker tone could minimize the cash cattle rally this spring. With showlists lower, carcass weights mostly steady with those of a year ago and consumer demand still strong -- feedlots see this as the perfect storm to push prices higher. But they'll need the support of the live cattle contracts if it's going to be a significant rally. February's contract expires today and so the market's official spot contract is now on the beloved April contract. April live cattle closed $0.50 lower at $141.42, June live cattle closed $0.60 lower at $137.70 and August live cattle closed $0.27 lower at $137.15. The cash cattle market didn't see any interest and it's likely packers are going to be tough to deal with as they have some cattle already committed for this week. Feedlots will have to work closely with one another if they're going to get more money than a week ago. 

Monday's slaughter is estimated at 122,000 head -- 14,000 head more than a week ago and 4,000 head more than year ago.

Last week's negotiated cash cattle trade totaled 68,349 head. Of that 66% (45,392 head) were committed for nearby delivery, while the remaining 34% (22,957 head) were committed for deferred delivery.

Boxed beef prices closed lower: choice down $0.76 ($257.51) and select down $2.00 ($253.41) with a movement of 85 loads (50.43 loads of choice, 17.91 loads of select, 3.13 loads of trim and 13.78 loads of ground beef).

TUESDAY'S CASH CATTLE CALL: Steady to $1.00 higher. Packers are going to be tough to crack this week as they already have some cattle committed for this time. That being said, seeing higher trade isn't completely out of the question. The bigger question is: Will feedlots be able to limit the cattle packers buy with time this week? Or will packers continue to build their arsenal and slowly cut the legs out from underneath the cash market a week at a time?

FEEDER CATTLE:

The feeder cattle complex closed lower as the grain market posted a significant rally. With Ukrainians fighting for their lives and trying to keep Russia from gaining any more power over their people, the grain markets have turned heated as Ukraine is a major player in the grain world. Feeder cattle contracts were able to close with softer losses than what were faced earlier in the day. March feeders closed $2.30 lower at $157.72, April feeders closed $2.75 at $162.00 and May feeders closed $2.80 lower at $167.80. At Joplin Regional Stockyards in Carthage, Missouri, compared to last week on a run of 4,777 head feeder steers under 500 pounds traded $3.00 to $5.00 higher. Heavier weights traded steady. Feeder heifers traded $1.00 to $3.00 higher. It's likely that market continues to see the trend of feeder cattle trading mixed as buyers don't want to pick up more cattle for the summer months when there's more opportunity in the deferred months. The CME Feeder Cattle Index 2/25/2022: down $0.67, $159.91.

LEAN HOGS:

The nearby lean hog contracts struggled through Monday's trade, but the late 2022 and early 2023 contracts rallied through the day's close. The lean hog complex has fared far better than the cattle contracts have with the onset of geopolitical tensions. The fact remains that supplies of market-ready hogs continue to be thin and consumers are aggressively seeking pork as it's an affordable option compared to the other meats. Pork cutout values could stall out as Lent begins this Wednesday. But if the futures market is to keep rallying, it will need to see some support from cutout values. April lean hogs closed $0.17 lower at $103.50, June lean hogs closed $0.45 lower at $113.42 and July lean hogs closed $0.57 lower at $112.97. Pork cutouts totaled 274.24 loads with 248.13 loads of pork cuts and 26.11 loads of trim. Pork cutout values: down $1.05, $112.27. Monday's slaughter is estimated at 470,000 head -- 8,000 head less than a week ago and 5,000 head less than a year ago. Friday's hog slaughter was revised to 471,000 head and Saturday's slaughter was revised to 126,000 head. The CME Lean Hog Index 2/24/2022: up $0.36, $98.40.

TUESDAY'S CASH HOG CALL: Steady to somewhat higher. Monday's cash hog market wasn't very lively, I'd expect trade to see more interest come Tuesday or Wednesday.

Monday Midday Livestock Market Update - Russia Uncertainty Wreaks Havoc on Cattle Contracts

GENERAL COMMENTS:

In times like these you'd hope the markets would take a defensive role against the world's chaos and protect their price points without ceasing. But as uncertainly spreads like wildfire, traders sell all they can and the markets snowball. May corn is up 35 cents per bushel and May soybean meal is up $10.50. The Dow Jones Industrial Average is down 320.00 points and NASDAQ is down 22.22 points.

LIVE CATTLE:

As the market sits ripe for a cash cattle rally, all hell has broken loose across the globe. In years past, the cash cattle market was able to rally solely on the market's fundamentals. But as the market has become more and more thinly traded, the cash cattle market now needs the support of the futures market in order to summon any substantial cash rally. With new showlists appearing to be somewhat lower in Nebraska/Colorado and lower in Kansas and Texas -- feedlots are eager to ask for higher cash prices. But they don't know if they'll be able to get much out of packers as they'll undoubtedly use the world's turmoil to their advantage. April live cattle are down $1.32 at $140.57, June live cattle are down $1.52 at $136.80 and August live cattle are down $1.25 at $136.17.

Last week's negotiated cash cattle trade totaled 68,349 head. Of that 66% (45,392 head) were committed for nearby delivery, while the remaining 34% (22,957 head) were committed for deferred delivery.

Boxed beef prices are mixed: choice up $0.07 ($258.34) and select down $0.13 ($255.28) with a movement of 40 loads (21.15 loads of choice, 9.65 loads of select, zero loads of trim and 9.21 loads of ground beef).

FEEDER CATTLE:

In college, kids will often play drinking games (beer pong, king's cup, dice, etc.) as a way to pass time as they celebrate their school pride or try drown out the memory of how horribly they did on their recent chemistry exam. Well, if the feeder cattle market did the same, it would be well past drunk and the noon hour has yet to even ring. Russia sends fierce rocket attack on Ukraine (drink). Corn flirts with $7.00 per bushel (drink). The live cattle market only sold 68,349 head in last week's cash market (drink). And remember it's only Monday!

The feeder cattle complex is a prime example of why we need to keep our wits about us amid external market pressure -- even though it may be easier to drink our sorrows away. While the futures market chatters in terror with so much unknown in our world thanks to Putin, avoiding any and all sort of emotional reactions is vital to the market's long-term success. March feeders are down $3.50 at $156.52, April feeders are down $4.50 at $160.25 and May feeders are down $4.35 at $166.25. It's likely that calves are sought aggressively again this week as the feeder cattle market looks to capitalize on the opportunity that this fall has to offer.

LEAN HOGS:

As the rest of the marketplace tremors in the fear of the unknown, the lean hog complex is keeping a calm and cool expression as it's market fundamentals haven't changed -- supplies of market-ready hogs are thin and demand is strong (score). April lean hogs are up $0.50 at $104.17, June lean hogs are up $0.95 at $114.82 and July lean hogs are up $0.47 at $114.02. In order for the futures market to keep its upward trajectory, the market will need to continue to see support from pork cuts. The $7.60 jump Monday morning could be overdone as it's the morning report, so keep close tabs on the afternoon data.

The projected CME Lean Hog Index for 2/25/2022 is up $0.69 at $99.09, and the actual index for 2/24/2022 is up $0.36 at $98.40.

Hog prices are higher on the National Direct Morning Hog Report, up $1.88 with weighing average of $88.37, ranging from $87.00 to $96.00 on 3,393 head and a five-day rolling average of $86.60. Pork cutouts total 153.90 loads with 131.31 loads of pork cuts and 22.60 loads of trim. Pork cutout out values: up $7.60, $120.92.

Monday Morning Livestock Market Update - Futures May Face Pressure

GENERAL COMMENTS:

Live cattle futures have fallen back to levels they were at a month ago. Even with higher cash prices over the period, the anticipation is that it may now have run its course. Over much of the past month, boxed beef prices had been declining. Boxed beef on Friday finally showed a positive number for select cuts with a gain of $0.86, however choice declined $0.97. Cash was steady in the South with Northern trade $1.00 higher. The Cattle of Feed report is considered neutral and should have no significant impact on the market. On feed numbers totaled 12.2 million head and were 101% or 1% higher than a year ago compared to the average trade estimate of 100.7%. Placements were 995 compared to the average estimate of 98.76%. Marketings in January came in at 97% compared to the trade estimate of 97.1%. Cattle may have a struggle ahead of it Monday based on the surge of grain prices again following developing news of more severe sanctions on Russia. Monday is the final day to trade February live cattle.

Hog futures have suffered a Katie-bar-the-door selling event during the second half of last week. Underlying fundamentals have not changed as the industry is starting at tighter hog supplies. Futures were due for a correction and correcting is what they did with a vengeance. The National Direct Afternoon report showed a decline of $0.35 along with cutout values declining $0.81. Weekly export sales were good Friday at 26,600 mt, up 45% for the previous week. Packers need to be aggressive in purchasing hogs, but they may be cautious Monday waiting to see how the beginning of the week unfolds in other outside markets. Futures have corrected from an overbought market, but it is uncertain whether the correction has been enough to bring buyers back into the market.

	BULL SIDE		BEAR SIDE
1)	April live cattle takes over as front month Monday with futures having a chart gap above the market that needs to be filled.	1)	Escalating feed prices may increase the desire of feedlots to move cattle as quickly as possible rather than hold for higher prices.
2)	The neutral Cattle on Feed report will now turn trader's attention back to tightening supplies.	2)	Lower cattle futures, higher feed prices and continued weakness of boxed beef may cause packers to bid lower.
3)	Three days of fund liquidation have now been completed. This could increase the interest of traders to buy back into the market.	3)	Hog futures have been unable to find support as they correct from an overbought status. Further weakness may carry through Monday.
4)	Packers may be aggressive again this week as they need hogs to keep a strong slaughter pace to fill demand. Tightening supplies remain a concern limiting downside price potential.	4)	April hog futures retain a significant premium to cash. More than usual for this time of year.

Friday Closing Livestock Market Update - Live Cattle, Lean Hogs Close Lower as Traders Check Out

GENERAL COMMENTS:

As the world absorbs changes and developments of all sorts, the markets are left to do one thing -- trade. Sometimes that trade wavers, sometimes that trade reacts and sometimes that trade carries on strong, without missing a beat. The war between Russia and Ukraine has undeniably disturbed our markets, but for how long and to what degree remain the unanswered questions. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.35 with a weighted average of $87.78 on 3,153 head. May corn is down 34 1/2 cents per bushel and May soybean meal is down $12.90. The Dow Jones Industrial Average is up 834.92 points and NASDAQ is up 221.04 points.

From Friday to Friday livestock futures scored the following changes: February live cattle down $3.97, April live cattle down $3.95; March feeder cattle down $5.40, April feeder cattle down $6.10; April lean hogs down $5.73, June lean hogs down $4.75.

LIVE CATTLE:

Whether it's a fire, a cyberattack, a global pandemic or the news of war, all these things have one thing in common -- they negatively affect the live cattle market. It's a good thing cattlemen are relentless souls because more often than not things negatively affect their market and there's very few things that rally their market in the same way. This week leaves us with more unanswered questions than answered questions, but among the top of the list is how will this affect the cash cattle market's ability to rally this spring? We know market fundamentals haven't changed. Americans still want beef and we are operating with a small cowherd. But will the futures market reflect those fundamental realities? Or will the technical side of the market be shorted by speculators who fear any sort of a position and ultimately refuse to dabble in the market for any period of time.

April live cattle closed $0.37 lower at $141.92, June live cattle closed $0.30 lower at $138.30 and August live cattle closed $0.25 lower at $137.42. This week's business ranged from $138 to mostly $142 in the South, fully steady with last week. Northern trade sold for $225 to $229, mostly $227, $1 higher than last week, but the majority of dressed deals were set for delivery the week of March 7.

Friday's slaughter is estimated at 119,000 head -- 2,000 head less than a week ago and steady with a year ago. Saturday's slaughter is projected to be around 50,000 head -- 1,000 head less than a week ago and 12,000 head less than year ago.

Boxed beef prices closed mixed: choice down $0.97 ($258.27) and select up $0.86 ($255.41) with a choice/select spread of $2.86, and with a movement of 104 loads (57.81 loads of choice, 14.61 loads of select, 23.11 loads of trim and 8.71 loads of ground beef). Throughout the week choice cuts averaged $260.82 (down $9.06 from last week) and select cuts averaged $258.88 (down $7.15 from last week) and the week's total movement of cuts, grinds and trim totaled 686 loads.

MONDAY'S CASH CATTLE CALL: Steady. Packers have cattle bought with time for the weeks ahead which bodes negatively for the market. But as we saw with Thursday's carcass data, showlists are current and supplies of market-ready cattle are tight, which should help drive prices higher.

FEEDER CATTLE:

From the pressures of the grain complex to the undeniable truth that when you're a thinly traded market new announcements like Thursday's can shatter your position faster than the speed of light. Nevertheless, the feeder cattle complex had a tough week where pressure mounted from every angle and the live cattle complex lent nearly no support. After a nosedive of a close lower on Thursday, Friday's market aimed to regain some position, but the complex still closed substantially lower than both the 40- and 100-day moving averages. March feeders closed $0.92 higher at $160.02, April feeders closed $0.95 higher at $164.75 and May feeders closed $0.87 higher at $170.60. The Oklahoma Weekly Cattle Auction Summary shared that compared to last week, through the entire state, feeder steers and heifers traded $1.00 to $3.00 lower, except heifers weighing 600 to 695 pounds traded $3.00 to $6.00 higher. Stocker steers and steer calves trended $2.00 to $4.00 softer. Stocker heifers and heifer calves traded $1.00 to $3.00 lower. The market noted mixed demand for feeder cattle but continues to see better interest for stockers and calves. Slaughter cows traded $3.00 to $6.00 higher and bulls traded unevenly steady. The CME Feeder Cattle Index 2/24/2022: down $1.24, $160.58.

LEAN HOGS:

Even the lean hog's untouchable luster came to a halt this week as the market topped Wednesday and closed lower the rest of the week. Cash prices closed slightly lower Friday and the pork cutout value waned as well. It's hard telling if the market's pause is a long-term top, or just an opportunity to breath and catch its air as fundamentally the market's situation hasn't changed. April lean hogs closed $1.85 lower at $103.67, June lean hogs closed $2.22 lower at $113.87 and July lean hogs closed $2.52 lower at $113.55. It's tough telling what the futures market will do next week as traders have a tendency to react to any and all headlines. But the lean hogs fundamental outlook remains the same -- demand domestically is strong and supplies of hogs are thin. Pork cutouts total 256.72 loads wit 210.01 loads of pork cuts and 46.72 loads of trim. Pork cutout values: down $0.81, $113.32. Friday's slaughter is estimated at 477,000 head -- 12,000 head more than week ago and 16,000 head less than a year ago. Saturday's slaughter is projected to be around 131,000 head - 31,000 head less than a week ago and 45,000 head less than a year ago. The CME Lean Hog Index 2/24/2022: not available at this time.

MONDAY'S CASH HOG CALL: Lower. Packers haven't been aggressive in Monday's market for some time and they'll likely sit back and wait until Tuesday or Wednesday until they buy a considerable number of hogs.

Friday Midday Livestock Market Summary - Contracts Tread Water, Long for Answers

GENERAL COMMENTS:

Live cattle and lean hog futures are trading lower Friday as the market seems to be holding its breath while the war in Ukraine sparks frustration and turmoil across the globe. Meanwhile, the feeder cattle contracts are licking their wounds and attempting to regain some positioning after plummeting lower Thursday. May corn is down 34 cents per bushel and May soybean meal is down $12.70. The Dow Jones Industrial Average is up 755.77 points and NASDAQ is up 182.38 points.

LIVE CATTLE:

Live cattle futures are modestly lower moving into Friday afternoon. After taking a deep nose-drive of a ride in Thursday's trade, the market is keeping with its cautious tone amid the war in Ukraine. With the February contract expiring Monday, the market is locked into monitoring the behavior of the beloved April contract. It hasn't been a good technical week for the live cattle complex and that again comes at the cost of cattle producers (surprise, surprise). The cash market has worked tirelessly to move higher and was elated to see the strength in the April contract just days ago. But as time passed, the April contract grew weaker (trading at $141.65, as opposed to the contract's high of $147.82). Feedlots still want to see the cash market shine this spring before the pressure of summer nears. April live cattle are down $0.60 at $141.65, June live cattle are down $0.55 at $138.05 and August live cattle are down $0.47 at $137.20. There's been a handful of trade reported in Kansas Friday morning, but largely the market has sat without much interest. Thus far throughout the week Northern cattle have traded from $225 to $229, mostly at $227, which is $1.00 higher than last week -- but most of the cattle are committed for the week of March 7. Southern live cattle traded have ranged from $138 to $143, mostly at $142, which is fully steady. This afternoon another Cattle on Feed Report will be shared.

Beef net sales of 14,500 metric tons (mt) for 2022 were down 37% from the previous week and 25% from the prior four-week average. The three largest buyers were Japan (4,900 mt), South Korea (2,300 mt) and China (1,900 mt).

Boxed beef prices are higher: choice up $0.53 ($259.77) and select up $1.18 ($255.73) with a movement of 71 loads (35.01 loads of choice, 8.30 loads of select, 21.98 loads of trim and 6.08 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures are weathering an unbridled case of whiplash as the market plummeted throughout Thursday's trade but is now attempting to recover some of what was lost. March feeders are up $0.60 at $159.65, April feeders are up $0.75 at $164.55 and May feeders are up $0.80 at $170.52. With a flash of a new headline, at any given point in time the market could become subject to drop again. But for now, the market is trading fully higher as the grain markets retreat.

LEAN HOGS:

Lean hog futures are drifting lower throughout Friday's trade as the market seems to have found a top for the time being. Our North American partners were strong supporters of U.S. pork in this week's export report, which by and large fared better than I assumed it would. The market will likely keep with this lethargic regression throughout the rest of the day and look to next week for a better understanding of how the market should trade in the short term. April lean hogs are down $1.55 at $103.97, June lean hogs are down $1.77 at $114.32 and July lean hogs are down $1.92 at $114.15.

Pork net sales of 26,600 mt for 2022 were up 45% from the previous week but down 8% from the prior 4-week average. The three largest buyers were Mexico (12,800 mt), Canada (6,700 mt) and Japan (3,100 mt).

The projected CME Lean Hog Index for 2/24/2022 is up $0.36 at $98.40, and the actual index for 2/23/2022 is down $0.12 at $98.04. Hog prices are lower on the National Direct Morning Hog Report, down $1.09 with a weighted average of $86.49, ranging from $86.00 to $94.75 on 2,686 head and a five-day rolling average of $85.89. Pork cutouts total 156.40 loads with 140.13 loads of pork cuts and 16.26 loads of trim. Pork cutout values: up $1.07, $115.20.

Friday Morning Livestock Market Update - Selling Pressure May Pause

GENERAL COMMENTS:

February and April live cattle futures left minor chart gaps on the open Thursday as traders exited long position due to the strong gains in grain futures. Feeder cattle left large price gaps in all contracts with futures falling back to price levels last seen in November in the March and April contracts. Grain price did not retain the strength of overnight trade throughout the day, relieving some pressure on futures. Cash cattle trade was a bit disappointing with trade taking place steady with last week. Boxed beef continued to fall with choice down $1.64 and select down $4.41. There seems to be no bottom for boxed beef. Cattle futures could show mixed trade Friday as grain futures fell substantially overnight. Weekly export sales may provide some direction. The Cattle of Feed report will be release after the close. Cattle on feed is expected at 100.9%, placements at 99.2% and marketings at 97.1% compared to a year ago.

Hog futures succumbed to spillover pressure from cattle over time. Initially, futures were higher as strong cash the previous day and lower futures increased the interest of traders to buy back into the market. That was short-lived resulting in renewed selling. Futures pressure could follow through Friday, but the selling pressure may subside after two days of liquidation and substantial pressure in the grain markets. Support did not come from the cash market with the National Direct Afternoon report showing a loss of $6.97. The surprise was pork cutouts jumped $5.01 on good volume. Weekly export sales will need to be good, or pressure could continue into the weekend. Saturday hog slaughter is estimated at 120,000 head.

	BULL SIDE		BEAR SIDE
1)	Both live and feeder cattle contract left gaps Thursday that may be filled over time.	1)	Cattle futures fell substantially the past two days has done substantial damage to price charts. This may be difficult to overcome in the near term.
2)	February live cattle futures are at a discount to cash. Steady cash should provide support as the contract ceases trading on Monday.	2)	Cash cattle trading no better than steady Thursday does not bode well for any remaining trade that needs to be accomplished Friday.
3)	Pork cutouts surged Thursday, which might provide some support to futures today after the two-day selloff.	3)	Hog futures broke through and closed below the strong uptrend line that developed since the beginning of the year. This, along with an overbought market, could trigger further technical selling.
4)	Strong weekly export sales Friday could turn the market back up as other fundamentals have changed.	4)	If weekly export sales are disappointing, another day of price weakness might unfold.

Thursday Closing Livestock Market Update - Futures Drop $2 to $4 On Wild Day

GENERAL COMMENTS:

The actual values of animals and meat products in the U.S. haven't been instantaneously changed by this new war in Ukraine. Cash cattle, for instance, saw light trade Thursday fully steady with last week's weighted averages: $142 Southern live basis. On the National Direct Afternoon Hog Report, prices were down $6.97 to a weighted average price of $88.13 on 3,100 head, but base prices ranged widely between $85 and $101.50. The futures markets are, of course, more sensitive to the global panic of the day, and Thursday's dramatic chart action will carry a long-term legacy that will either last as the pivot point putting an end to the past month's upward trend or require some serious correction in the coming days. March corn is up 11 1/4 cents per bushel to $6.95 and March soybean meal is down $6.20 per ton to $464.90. The Dow Jones Industrial Average closed up 91 points and the NASDAQ closed up 465 points.

LIVE CATTLE:

Light cash cattle trade developed midday Thursday in the South with live deals marked at $142, fully steady with last week's weighted averages and following up on Wednesday's light-to-moderate dressed trade at $227 in the North (for delivery the week of March 7). More business will still likely need to take place Friday and asking prices remain around $144 to $145 in the South and $229 to $230 in the North. Evidently neither one day of panicky futures trade (the April contract closed down $2.45 at $142.30) or the dwindling boxed beef prices have seriously dented the resilient nuts-and-bolts of this industry that still needs to get a steady volume of fat cattle moving from feedlots into packing facilities. Steer and heifer slaughter weights have dropped substantially this week, down 12 pounds to only 918 pounds for the average steer and down 6 pounds to only 848 pounds for the average heifer, emphasizing the urgency to source relatively high volumes of market-weight animals. 

Thursday's slaughter was seen at a hefty 124,000 head, which is 2,000 head more than a week ago and 3,000 more than a year ago. 

Boxed beef prices closed lower again and are dipping below price levels last seen in December 2021: choice down $1.64 ($259.24) and select down $4.41 ($254.55) with a movement of 170 loads (106.51 loads of choice, 21.31 loads of select, 9.75 loads of trim and 32.41 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady. Packers may take the spooked futures losses as a license to push back on prices despite the bullish momentum that cash traders have been able to amass in recent weeks. That's in contrast to asking prices around $144 to $145 in the South and $229 to $230 in the North, which, if realized, would represent a week-over-week gain of $2.00 to $3.00.

FEEDER CATTLE:

Feeder cattle futures are the poster child of what can go wrong when a futures market has relatively low open interest most days and then one sudden rush of trading volume on a panicky day. The nearby March contract closed down $3.675 at $159.10, leaving a big chart gap between $162.625 and $160.30, which traders may someday go back and fill in. The April contract, after opening the day down $6.25, ultimately closed down $4.475 at $163.80. Trading volume for that April contract was roughly double the average day. There are many outside market influences that could take the blame for this sudden collapse -- a dramatically higher U.S. Dollar Index amid widespread financial market panic, or the lower-then-schizophrenically-higher stock market -- but most will be pointing the finger at the feed markets. Nearby corn futures traded as much as 35 cents higher Thursday (limit up) before ending the day up "only" 11 1/4 cents at $6.95. A $7 handle on cash corn is never going to look great for the cattle-feeding business, so it remains to be seen whether any or all of these markets can regain some kind of calmer equilibrium when trade resumes Friday. The CME Feeder Cattle Index for 2/22: up $0.13, $162.26, and it has been reliably steady through the past week.

LEAN HOGS:

Lean hog futures moved lower Thursday, mostly in sympathy with the volatile cattle futures trade, but perhaps also sensing a timely opportunity to take a rest from their seemingly inexhaustible upward momentum seen since January. The April contract closed down $2.50 at $105.525, the May contract closed down $2.525 at $110.125, and all the deferred contracts also posted losses of at least $0.475 at the close. The higher U.S. dollar and its implications for export pork prices could dampen some of the fundamental bullishness that's been feeding this market's trend of higher prices. However, other than currency fluctuations, the new Russian war doesn't seem like it will have much direct impact on global pork trade. Russia used to import about a third of its pork, but now after a decade-long strategic boost in production, Russia has in the past couple of years reached self-sufficiency. Here at home, wholesale pork prices roared higher Thursday, led by volatile ham values: the afternoon pork cut-out report showed prices up $5.01 to $114.13, with 265.63 total loads (232.16 loads of cuts and 33.47 loads of trim). The CME Lean Hog Index for 2/22: unchanged, $98.16, and the projected Index for 2/23 is down $0.12, $98.04.

FRIDAY'S CASH HOG CALL: Steady. Continued higher momentum in pork prices will support packers' business model, but winter weather could cause some logistical hiccups.

Thursday Midday Livestock Market Summary - Feeder Cattle Still in a Stunning Nosedive

GENERAL COMMENTS:

On a day when everyone else is making big, dramatic moves (including the Russian Army), we can't expect the livestock markets not to do the same. Futures prices have been collapsing by triple digits since USDA revealed its baseline crop acreage projections on Thursday morning, suggesting only 88 million acres of soybeans but 92 million acres of corn will be planted in 2022. Light cash cattle trade so far this week has shown roughly steady live prices at $142 and dressed prices at $227. March corn is up 15 cents per bushel and March soybean meal is down $7.30 per ton. The Dow Jones Industrial Average is down 677 points and NASDAQ is down 39 points.

LIVE CATTLE:

Losses of more than $2 per cwt in the live cattle futures market have given back nearly all of this month's hard-won gains, putting the April contract as low as $142.20 midway through Thursday morning. This may not be the ultimate direction the livestock markets need to move to respond to the changes in geopolitical trade fundamentals, but it was the obvious direction to take on a day when Europe is now facing a war, the stock market is plunging, crude oil has tested the air above $100 per barrel, and grains are whipsawing up or down by double digits throughout the session. The nearby February live cattle contract is down $1.825 at $141.225 and the April contract is down $2.450 at $142.30. Otherwise, it might have been a relatively calm, bullish day in this market, with a strong Thursday slaughter projection at 122,000 head and more cash cattle trade still expected in line with last week and the light business seen so far around $142 live and $227 dressed. No matter what happens in Ukraine, Americans are still going to want their hamburgers.

The Special Fed Cattle Exchange Auction held Thursday listed a total of 2,229 head (Texas 1,650 head, Kansas 192 head, Iowa 115 head, California 140 head, Nebraska 69 head, and Oklahoma 63 head), all of which went unsold again, as they did not meet the reserve prices, which ranged from $142 to $145. Opening prices ranged from $139 to $140; high bids ranged from $139 to $141.50.

Meanwhile, the beef market continues to slip lower, with choice values landing almost back at their December 2021 lows. Choice prices are down $0.12 Thursday morning ($260.76) and select down $3.48 ($255.48) with a movement of 101 total loads (59.85 loads of choice, 16.35 loads of select, 9.75 loads of trim, and 14.77 loads of ground beef).

FEEDER CATTLE:

The March feeder cattle contract is down $4.00 to $158.775 and the April contract is down $3.775 at $164.50. But, these losses have been even more grievous at various points in the morning, with the steepest temporary losses seen in the April contract down by $6.25 per cwt right away when the session opened amid very heavy trading volume. This has clearly left a gap on the chart that may eventually be filled in once the global panic has worked its way through the system. In fact, it's hard to say if the volatility that's spilling over from the feed markets is entirely due to Russian aggression and geopolitical trade risk, or how much of it might instead be related to USDA's new baseline 2022 acreage projections, which suggested 92 million acres of corn could be planted this spring. On its own, that number might even look a little bearish for new-crop corn prices and relieve some of the pressure from the long-term outlook for cattle feeders' profitability. For now, though, $7 nearby corn futures and a European war are not positive for the feeder cattle market.

LEAN HOGS:

On Thursday, all the lean hog futures contracts between April and August 2022 are trading lower in sympathy with the volatile outside markets; but the deferred contracts past October remain lightly higher amid quiet trade. The April lean hog contract is down $1.30 at $106.725 and the May contract is down $0.875 at $111.775. This week's export sales report won't be released until Friday after the President's Day holiday shortened the week; but even then it won't show Thursday's bearish impacts to export pork prices when the U.S. dollar is skyrocketing amid geopolitical fear-based trade. Meanwhile, snarly winter weather is hitting Missouri and North Carolina Thursday, which may limit some movement of both animals and product. There are 476,000 head projected to be slaughtered Thursday, which is down 1,000 head from a week ago and down 18,000 from a year ago.

The CME Lean Hog Index from 2/21 was 98.16 (up $1.04) and the projected index for 2/22 is also $98.16 (unchanged). Pork cutouts Thursday morning total 128.77 loads with 11.94 loads of pork cuts and 16.83 loads of trim. Pork cutout values: up suddenly $8.05, to $117.17.

Thursday Morning Livestock Market Update - Uncertainty Over Ukraine Invasion

GENERAL COMMENTS:

Cattle futures seem to have run out of steam and are heading lower. Futures broke below technical support and closed near the lows. This may trigger further selling despite higher cash trade developing late Wednesday. Some trade developed in parts of the North $1.00 higher than last week at $227 dressed on a weighted average basis Nebraska. Live business took place at $144, roughly $2 higher than last week's weighted average basis Nebraska. This should provide support except for the events overnight with Russia invading Ukraine. Corn futures are limit up overnight which may put considerable pressure on the market despite higher cash. Boxed beef fell again with choice down $0.76 and select down $4.68.

Hogs turned quickly after again making new contract highs. Selling erupted triggering further liquidation as traders tried to exit the market and preserve any profit they had. Traders will be torn between the National Direct Afternoon price up $5.77 along with cutouts up $0.36 and the discovery of the highly pathogenic avian flu discovered in Delaware, the invasion of Russia into the Ukraine and the potential for further weakness as traders liquidate long positions. Weekly export sales will not be released until Friday. Saturday slaughter is estimated at 120,000 head.

	BULL SIDE		BEAR SIDE
1)	Late trade developed in live cattle $1.00 to $2.00 higher mainly in the North. Trading is expected to be more active today as packers need cattle.	1)	Corn prices are locked limit up overnight and could put substantial pressure on cattle futures furthering the weakness that has already developed this week.
2)	Traders may step back in to buy futures more aggressively due to stronger cash after the recent weakness. Investor money may also flow in as the stock market declines.	2)	Price support in boxed beef remains elusive. Packers may pull back on bids due to declining profits as well as the idea that feedlots may increase their desire to sell.
3)	The uptrend remains intact in hog futures despite the sell off Wednesday. Traders may take advantage of the break to increase their long positions due to tightening hog supply.	3)	Hog futures may see follow-through liquidation after selling was triggered yesterday. Fund liquidation generally runs two to three days.
4)	Strong cash and higher cutouts should continue to support the market as packers are aggressively purchasing hogs to fill slaughter capacity and demand.	4)	The strong increase of grain prices due to Russia invading Ukraine may have a negative impact on futures.

Wednesday Closing Livestock Market Update - Loss Seen Throughout Futures

GENERAL COMMENTS:

It was a tough day for the livestock complex as the live cattle, feeder cattle and lean hog contracts all saw losses. The market has become very cautious given the tensions growing with the Russia/Ukraine situation. While that may seem like a foreign issue that won't affect our soil specifically, it will indeed affect our trade. Hog prices closed higher on the National Direct Afternoon Hog Report, up $5.77 with a weighted average of $95.10 on 8,934 head. March corn is up 9 cents per bushel and May soybean meal is up $15.20. The Dow Jones Industrial Average is down 464.85 points and NASDAQ is down 344.03 points.

LIVE CATTLE:

It was a pullback day for the live cattle contracts as its fellow livestock counterparts retreated; traders seem unwilling to push the markets any higher at this point. April live cattle closed $1.27 lower at $144.75, June live cattle closed $0.77 lower at $141.12 and August live cattle closed $0.72 lower at $140.07. It's disappointing to see the futures market retreat from its aggressive push as the cash cattle market now stands an excellent chance at pushing prices higher. But the markets desperately need to work together to reach maximum price discovery. Thankfully, throughput continues to run at strong levels, which only bodes more and more positively for feedlots as packers work through supplies. There was another round of light cash cattle trade. Live prices traded at $142 and dressed prices at $227; but again, this was on a light sampling. The market still needs more cattle to trade and for prices to be solidified for the week. 

Wednesday's slaughter is estimated at 123,000 head -- 1,000 head more than a week and year ago.

Boxed beef prices closed lower: choice down $0.76 ($260.88) and select down $4.68 ($258.96) with choice/select spread of $1.92 and a movement of 196 loads (137.84 loads of choice, 23.28 loads of select, 12.57 loads of trim and 22.59 loads of ground beef).

**Correction to Tuesday's Closing Comments -- The last time the choice/select spread was inverted was on 9/12/2017 (choice $190.79, select $190.86, spread -$0.07).**

THURSDAY'S CASH CATTLE CALL: Steady to $2.00 higher. The market still stands a chance at getting prices higher as fundamental cues encourage higher prices. But its whether or not feedlots can move the market higher when the board is trading lower and foreign uncertainty casts a negative tone across the markets.

FEEDER CATTLE:

To no surprise, the feeder cattle complex closed lower amid a rock 'n roll market on the grain side of things. The cash cattle market sold a handful for slightly higher prices, but until the live cattle complex can lend some support and the pressure eases from the commodities, it's a bleak outlook for the feeder cattle contracts. March feeders closed $1.45 lower at $162.77, April feeders closed $0.85 lower at $168.27 and May feeders closed $0.85 lower at $173.67. What's become very apparent at the sale barn level is that buyers are more interested in lightweight calves than they are feeders. With the substantial premiums fall feeder cattle contracts have to offer, buyers know supplies of feeders will be thin during that time and feedlots will have to get aggressive to procure the cattle they need. At Winter Livestock in Dodge City, Kansas, compared to last week on a run of 2,522 head, feeder steers weighing 650 to 975 pounds traded $3.00 to $5.00 lower. Steer calves weighing 350 to 650 pounds sold $6.00 to $10.00 higher. Feeder heifers weighing 625 to 900 pounds traded $3.00 to $4.00 lower. Heifer calves weighing 400 to 625 pounds sold $5.00 to $7.00 higher. Slaughter cows sold steady, but slaughter bulls sold $5.00 lower. The CME Feeder Cattle Index 2/22/2022: up $0.13, $162.13.

LEAN HOGS:

The lean hog complex bled lower like the rest of the marketplace as Wednesday served up a gruesome day for the futures market. April lean hogs closed $4.05 lower at $108.02, June lean hogs closed $2.45 lower at $118.77 and July lean hogs closed $1.92 lower at $118.32. The market's hesitantcy stems from the uncertainty that's looming with the Russia/Ukraine situation. And from the fact that there has been a case of the Highly Pathogenic Avian Influenza (HPAI) in a poultry flock in New Castle County, Delaware, which can be spread to both humans and hogs. At this time, there are no cases of HPAI in hogs in the U.S. But still, it's a market concern. Packers got busy buying hogs Wednesday afternoon as the market saw close to 9,000 head trade and prices jumped $5.77 higher. With supplies of market-ready hogs as thin as they are -- and with low levels of pork in cold storage -- the cash hog market will likely continue to be supported as pork products are in hot demand. Pork cutouts total 248.28 loads with 217.39 loads of pork cuts and 30.89 loads of trim. Pork cutout values: up $0.36, $109.12. Wednesday's slaughter is estimated at 473,000 head -- 1,000 head more than week ago and 22,000 head less than year ago. Tuesday's slaughter was revised to 472,000 head -- 7,000 head less than what was originally stated. The CME Lean Hog index 2/21/2022: up $1.04, $98.16.

THURSDAY'S CASH HOG CALL: Steady to somewhat higher. Packers have been being aggressive in at least two days of this week for cash hog purposes. They were aggressive in Wednesday's market, and it's likely that they'll be somewhat aggressive in Thursday's market as well.

Wednesday Midday Livestock Market Summary - Contracts Trade Nervously

GENERAL COMMENTS:

The livestock complex trades cautiously Wednesday as the detection of Highly Pathogenic Avian Influenza in a commercial poultry flock in New Castle County, Delaware, raises red flags for the market. In addition, the developments between Russia and Ukraine continue to be worrisome. March corn is up 2 1/4 cents per bushel and May soybean meal is up $12.60.

The Dow Jones Industrial Average is up 61.06 points and NASDAQ is down 24.68 points.

LIVE CATTLE:

Live cattle futures are trending lower as the market trades timidly Wednesday. April live cattle are down $0.22 at $145.82, June live cattle are down $0.02 at $141.87 and August live cattle are down $0.17 at $140.62. The market has yet to see any cash cattle trade, but bids of $144 live and $227 dressed have been spotted in Nebraska. Asking prices are noted at $144 to $145 in the South and $230-plus in the North. It's anyone's guess at this point how cash cattle are going to trade. Feedlots stand a strong chance at getting cattle sold higher than last week as throughput continues at a good pace and packers need cattle. But given the developments between Ukraine and Russia, the entire marketplace is trading in a cautious and uneasy manner.

Tuesday's USDA Cold Storage report shared that pounds of beef in freezers rose 4% from last month and rose 1% from a year ago.

The Fed Cattle Exchange Auction on Wednesday listed a total of 2,037 head (Texas 1,650 head; California 140 head; Iowa 115 head; Nebraska 69 head; Oklahoma 63 head), of which none actually sold, as they did not meet the reserve prices, which ranged from $143 to $145. Opening prices were $140, high bids ranged from $140 to $143.50.

Boxed beef prices are mixed: choice up $0.97 ($262.61) and select down $2.15 ($261.49) equating to a choice/select spread of $1.12, and with a movement of 131 loads (98.29 loads of choice, 10.87 loads of select, 10.20 loads of trim and 11.99 loads of ground beef).

**Correction to Tuesday's Closing Comments -- The last time the choice/select spread was inverted was on 9/12/2017 (choice $190.79, select $190.86, spread -$0.07).**

FEEDER CATTLE:

With the soybean market rallying on top of what Tuesday's market accomplished, and with the corn market trending mostly steady, the feeder cattle contracts are still holding their breath, uneasy about the market's situation. March feeders are down $0.97 at $163.30, April feeders are down $0.22 at $168.90 and May feeders are down $0.27 at $174.25. The March contract dipped below the 40-day moving average by Tuesday's close, but now the market is teetering with trading below or right at the 100-day moving average. The feeder cattle market will need to see dynamite support from the live cattle complex if it's to trade higher amid the grain market's current pressure.

LEAN HOGS:

For the first time in six days, the lean hog complex is facing some opposition as the contracts come up against strong resistance. First, the market is weary of the presence of Highly Pathogenic Avian Influenza (HPAI) that was most-recently detected in a poultry flock in New Castle County, Delaware. This becomes worrisome for both humans and pork producers as the strain can be transmitted to people and pigs. The Center for Disease Control and Prevention stated that the recent HPAI detections do not present an immediate public health concern, but the markets are reacting. April lean hogs are down $3.87 at $108.20, June lean hogs are down $2.35 at $118.87 and July lean hogs are down $1.90 at $118.35.

Tuesday's USDA Cold Storage report should come as bullish news to the lean hog complex as frozen pork supplies were up 8% from last month, but down 6% from a year ago. And stocks of pork bellies were up 17% from a month ago, but down 43% from a year ago.

The projected CME Lean Hog Index for 2/22/2022 is unchanged at $98.15, and the actual index for 2/21/2022 is up $1.04 at $98.16. Hog prices are unavailable due to confidentiality. We can see 2,734 head have traded and the five-day moving average now sits at $84.66. Pork cutouts total 160.58 loads with 137.48 loads of pork cuts and 23.10 loads of trim. Pork cutout values: up $2.15, $112.24.

Wednesday Morning Livestock Market Update - Hogs Have No Ceiling

GENERAL COMMENTS:

Traders anticipate further cash strength this week for cattle and are keeping support under the market. It is uncertain what packers will do as they continue to see weaker boxed beef prices whittling away at profits. Yet, they still have profit, and demand is strong, which leaves them wanting to fill that demand. It would be a huge disappointment if cash cannot trade higher this week. However, it will be up to feedlots to hold out in the face of significantly higher feed prices. Boxed beef was mixed with choice down $2.45 while select increased $1.80. This moves the market into an inversion with choice $2.00 lower than select. This is a rarity with the last time boxed beef was inverted was in May 2018. Total beef in inventory in January was 525.4 million pounds, up 19.3 million pounds or 4 percent from December. The Commitment of Traders report showed funds as net buyers of 4,219 live cattle futures bringing their net long total to 86,061 contracts.

There just in no stopping the hogs with traders trying to pick a top getting run over on almost a daily basis. However, with strong cash, there is no other way to go. Higher grain prices are having no impact on the market. Financial markets are having no impact on the market. It is like futures are in a vacuum being continually sucked higher. Futures are overbought, but that is meaningless in a fundamentally bullish market. The National Direct Afternoon Hog reports showed cash up $6.77. Packers may lose some of their aggressiveness but only after they have sufficient supply purchased for the week. Weaker cutouts had no impact on the market as they have been choppy from one day to the next anyway. Total pork in cold storage reached 428.5 million pounds, up 32.0 million pounds or 8%. Bellies in storage totaled 44.6 million pounds, up 6.5 million pounds or 43% higher than a year ago. The Commitment of Traders report showed funds as net buyers of 570 contracts bringing their total net long positions to 79,242 contracts.

	BULL SIDE		BEAR SIDE
1)	Lower showlists may spur packers into being more aggressive to purchase what they can earlier rather than later.	1)	Continued weakness of boxed beef does not bode well for higher cash. The inversion of the choice and select price spread may indicate price resistance for higher end cuts of beef.
2)	Live cattle held in anticipation of higher cash in the face of strong feed prices and defying the pressure from weak feeder cattle futures.	2)	Cattle futures continue to test the low end of the trading range. If cash does not trade higher this week, futures could fall through support quickly.
3)	New contract highs in hog futures keeps the uptrend intact with the rise of prices seemingly gaining momentum. Traders are confident strength will continue.	3)	Hogs are overbought technically and anything that could trigger selling might result in a substantial price retracement.
4)	Packers are scouring the country for supply to meet strong demand and increased slaughter pace. Demand has not yet reached price resistance.	4)	April hogs are trading at a huge premium to cash of over $14.00, which may be a tall order to fill. The five-year average premium is $2.56 for this time of year.

Tuesday Closing Livestock Market Update - Choice Select Spread Closes Inverted

GENERAL COMMENTS:

What a week to step into. Tensions with Ukraine and Russia have escalated given that Russia has now entered Ukraine. Grain prices are through the roof as the invasion of Ukraine will affect trade. The feeder cattle contracts are sweating as grain prices rally to new highs. Boxed beef prices became inverted for the first time since 2018. How about that for the most Monday-feeling Tuesday ever?! Hog prices closed higher on the National Direct Afternoon Hog Report, up $6.77 with a weighted average of $89.33 on 5,075 head. March corn is up 20 1/2 cents per bushel and March soybean meal is up $5.80. The Dow Jones Industrial Average is down 482.57 points and NASDAQ is down 166.55 points.

LIVE CATTLE:

This week may be a short one given that Monday was a holiday, but that doesn't mean there won't be enough business to sort through. Grabbing the live cattle market's attention right from the get-go was that the choice/select spread became inverted -- select prices closing higher than choice prices; see below for exact prices. This doesn't happen very often, but when it does there are a couple of conclusions that can be drawn. First, consumers are tired of high meat prices. Whenever the Choice/Select spread becomes inverted, it's consumers way of saying they're unwilling to continue to pay higher prices for the better product and they'd prefer to take lower quality meat. Second, we know that seasonally the boxed beef market is looking for a bottom, but with this development, the market may face more regression.

Throughout Tuesday's trade, the live cattle market trended higher with ample support from traders, and upon the looming hope that cash cattle will trade higher. April live cattle closed $0.15 higher at $146.02, June live cattle closed $0.40 higher at $141.90 and August live cattle closed $0.30 higher at $140.80. The cash cattle market is anxious to post a strong rally this week with showlists mostly favorable to feedlots. New showlists appear to be mixed, higher in Texas, somewhat lower in Kansas and lower in Nebraska/Colorado. Tuesday's market didn't see any cash buying interest but come Wednesday the market could begin to see some trade. If throughput continues to fly through cattle, then feedlots stand a chance at keeping this momentum in the cash market. 

Monday's slaughter is estimated at 123,000 head -- steady with a week and year ago.

Last week's negotiated cash cattle trade totaled 98,691 head. Of that 83% (81,691 head) were committed for nearby delivery, while the remaining 17% (17,000 head) were committed for deferred delivery.

Boxed beef prices closed mixed: choice down $2.45 ($261.64) and select up $1.80 ($263.64) with a movement of 117 loads (82.48 loads of choice, 11.80 loads of select, 4.67 loads of trim and 17.80 loads of ground beef). The last time the choice/select spread became inverted was on 5/23/2018 (choice $203.08, select $205.04, spread -$1.94) and again on 2/27/2018 (choice $202.53, select $214.79, spread -$12.26).

WEDNESDAY'S CASH CATTLE CALL: $2.00 to $5.00 higher. The cash cattle market has a real chance at pushing prices higher this week. Throughput has been aggressive and packers are going to need cattle.

FEEDER CATTLE:

With the rally that sparked the enormous jump in grain prices (due to Russia entering Ukraine) the feeder cattle contracts had little hope of trading higher Tuesday. March feeders closed $1.20 lower at $164.22, April feeders closed $1.72 lower at $169.12 and May feeders closed $1.37 lower at $174.52. The cash cattle market is expected to rally this week (with a price jump of $2.00 to $5.00 not being out of the question) and the support from a strong live cattle/cash cattle market would certainly help. But the question that will go unanswered until the week is done trading is whether the market's support was strong enough to dilute the shock of the grain market's jump. The CME Feeder Cattle Index 2/21/2022: up $0.10, $162.13.

LEAN HOGS:

The lean hog complex didn't bat an eye at trading $1.00 stronger and once the afternoon rolled around the market seemed to laugh and shrug and say, "Let's up this party to over $2.00 strongwe and make the day worthwhile!" Indeed, the nearby contracts saw just that. April lean hogs closed $2.67 higher at $112.07, June lean hogs closed $2.60 higher at $121.22 and July lean hogs closed $2.72 higher at $120.25. And while the pork cutout value closed lower, given the gains that the market made last week, Tuesday's regions of $1.33 wasn't viewed as a big hit. Packers that needed hogs in Tuesday's cash market ended up paying the piper as cash prices jumped $6.77 but the day's volume was modest at 5,075 head. The market is looking to see a larger volume of hogs traded at sometime this week. Pork cutouts totaled 314.27 loads with 275.97 loads of pork cuts and 38.31 loads of trim. Pork cutout values: down $1.33, $108.76. Monday's slaughter is estimated at 479,000 head -- 1,000 head more than a week ago and 20,000 head less than a year ago. The CME Lean Hog Index 2/18/2022: up $1.89, $97.12.

WEDNESDAY'S CASH HOG CALL: Steady to somewhat higher. I know it may seem crazy to say prices could flirt with being stronger come Wednesday, but with how thin supplies of market-ready hogs are, if a packer is caught NEEDING hogs, they'll be at the mercy of the market.

Tuesday Midday Livestock Market Update - Cattle Tread Cautiously Into New Week

GENERAL COMMENTS:

After the long weekend, lean hog futures are rallying to new highs yet again, while the cattle contracts trade with hesitation. Heading into Tuesday afternoon the market will be closely watching boxed beef prices as the choice/select spread was inverted at midday. March corn is up 11 3/4 cents per bushel and March soybean meal is up $4.20. The Dow Jones Industrial Average is down 327.67 points and NASDAQ is down 165.41 points.

LIVE CATTLE:

The live cattle complex is seeing mixed interest as the market gets back to work after the long weekend. The February contract expires Monday (Feb. 28), but most traders have already jumped ship and are looking to April to set the spot market's tone. April live cattle are down $0.12 at $145.75, June live cattle are up $0.02 at $141.52 and August live cattle are down $0.02 at $140.47. Watching processing speeds will be important in the weeks ahead as it will directly indicate how many cattle packers need to procure. Packers have been strategic in their buying over the last month and, as you'll note, they're slowly stacking supplies around them as they buy cattle with time for deferred delivery. This negatively affects the spot cash cattle market as feedlots will see less interest from packers in the weeks to come. Thus far there's been no interest in the cash cattle market but asking prices in the South are noted at $144 to $145 and the North has yet to disclose what they're asking. New showlists appear to be mixed, higher in Texas, somewhat lower in Kansas and lower in Nebraska/Colorado.

Last week's negotiated cash cattle trade totaled 98,691 head. Of that 83% (81,691 head) were committed for the nearby delivery, while the remaining 17% (17,000 head) were committed for the deferred delivery.

Boxed beef prices are mixed: choice down $2.07 ($262.02) and select up $0.94 ($262.78) with a movement of 57 loads (30.82 loads of choice, 5.53 loads of select, 3.27 loads of trim and 16.94 loads of ground beef). The choice/select spread at midday is printing at -$0.76. When select cuts become worth more than choice cuts, the market has some evaluating to do. This could be the market's way of saying choice prices are simply too high. Before too much time is spent on the matter, we need to see how the afternoon's boxed beef prices close, so stay tuned.

FEEDER CATTLE:

With Russia deciding to enter two Ukraine provinces Monday, the grain complex jumped higher on the market's volatile, uncertain nature and it's likely this type of anxious environment continues to plague the grain markets until tensions decrease. That being the case, the feeder cattle contracts have taken to lower prices as feeders become worried about their breakeven and what their cost of gains could become. March feeders are down $1.57 at $163.85, April feeders are down $1.47 at $169.37 and May feeders are down $1.20 at $174.70. For the feeder cattle complex to trade higher, the market is going to need to see immense support from both the live cattle futures and the cash cattle market.

LEAN HOGS:

While the cattle contracts spend the early part of Tuesday trading lower, the lean hog contracts have wasted no time jumping to higher prices and continuing their upward surge. April lean hogs are up $1.12 at $110.52, June lean hogs are up $1.32 at $119.95 and July lean hogs are up $1.40 at $118.92. The cash hog market hasn't seen much interest, but that doesn't come as a surprise as in the last few weeks packers have been extremely aggressive in the cash market for two days, but then left the market mostly alone throughout the rest of the week. If pork cutout prices continue to see the type of interest and demand they saw last week, the market stands an excellent chance at keeping its momentum given that supplies are as thin as they are.

The projected CME Lean Hog Index for 2/21/2022 is up $1.04 at $98.16, and the actual index for 2/18/2022 is up $1.89 at $97.12. Hog prices on the National Direct Morning Hog Report average $83.64, ranging from $83.00 to $94.97 on 2,900 head with a five-day rolling average of $87.54. Pork cutouts are unavailable due to technical difficulties at the USDA.

Tuesday Morning Livestock Market Update - Cattle May Face Some Headwind

GENERAL COMMENTS:

Cattle futures seem to be in a sideways trading pattern. Cash cattle traded higher last week, but that had limited impact on the market and futures already had that factored in. It may be difficult for feedlots to see higher cash this week as continued weakness of boxed beef will weigh on the market. Choice cutouts slipped $0.03 with select cuts down $1.23. Yesterday, choice cuts fell $1.76 with select down $0.79 with the price spread now at $2.25. Packers will assess just how many cattle they need due to some already having some contracted for the near term. However, slaughter pace has been strong, and cattle are needed to fill plant capacity and demand. The issue feedlots face is higher feed prices. Grain futures are significantly higher overnight due to the developments in the Ukraine. Corn futures pushing to new highs may increase the desire of feedlots to move cattle sooner rather the later. Showlists are mixed showing lower numbers in Kansas, Nebraska/Colorado and higher in Texas.

Traders showed no desire to liquidate long positions into the weekend maintaining confidence in continued higher prices. Cash continues to indicate tighter supplies at a time when slaughter pace is getting back on track. Packers are looking for hogs and were not shy about getting them last week. The National Direct Afternoon report on Friday showed a gain of $2.00. The surprise was the gain of pork cutouts of $10.02. However, the National Direct Afternoon report showed cash down $4.22. Pork cutouts gained just $0.18 with hams falling $7.36. Traders come back from an extended weekend looking at high prices and an overbought market.

	BULL SIDE		BEAR SIDE
1)	Cattle futures may be building strong support due to strong cattle prices and steady demand.	1)	Cattle futures just could not move higher even though cash was higher again last week. Less premium is being maintained in futures relative to cash.
2)	Higher slaughter pace keeps packers looking for cattle as they want to keep plants running efficiently and demand satisfied. They will continue to contract ahead in order to keep ahead of tightening supply.	2)	Weakness of boxed beef may indicate slowing demand, which may cause packers to be less aggressive in the country this week.
3)	Strong cash keeps the trend in hogs higher. Traders hold much optimism that prices still have more upside.	3)	Hog futures are overbought and may have a correction after the strength of last week. We know the market will not go up forever as high prices cure high prices.
4)	Slaughter pace returning more to normal keeps packers aggressive as they look for hogs as supply tightens.	4)	Increased slaughter pace may eventually result in more availability of pork on the market. Cold storage may be building as we might see on the January Cold Storage report Tuesday.

Friday Closing Livestock Market Update - Pork Cutout Values Close $10 Higher Again

GENERAL COMMENTS:

It was a tremendous week for the lean hog complex as support rolled into the market from both the futures and fundamentals. The live cattle market saw mixed support as the cash jumped $2.00 higher, but the futures traded in a unenthused manner. Hog prices averaged 86.78 on the National Direct Afternoon Hog Report, ranging from $82.00 to $100.00 on 2,821 head. March corn is up 4 1/4 cents per bushel and March soybean meal is down $1.30. The Dow Jones Industrial Average is down 227.43 points and NASDAQ is down 170.09 points.

From Friday-to-Friday livestock futures scored the following changes: February live cattle up $1.38, April live cattle down $0.30; March feeder cattle down $0.80, April feeder cattle up $0.15; April lean hogs up $7.18, June lean hogs up $6.43.

LIVE CATTLE:

Live cattle futures closed disappointingly given that the cash cattle market batted for higher prices and walked away with a $2.00 advancement this week. The futures are in a holding pattern as the market tries to balance the ebbs and flows of the cash trade, all while keeping a close eye on the behavior of the summer live cattle contracts. February live cattle closed $0.15 lower at $143.25, April live cattle closed $0.90 lower at $145.87 and June live cattle closed $0.65 lower at $141.50. Boxed beef prices closed lower throughout the week and soon the market should have its seasonal low in before scaling higher into summer. Friday's cash cattle market didn't see much action as the week's business was largely done. Throughout the week live cattle in the South traded for mostly $142, which is $2.00 higher. Northern dressed cattle traded at $226, which is $2.00 higher as well, but a large majority of those cattle sold with time for the week of Feb. 28.

Friday's slaughter is estimated at 121,000 head -- 1,000 head more than a week ago and 13,000 head more than a year ago. Saturday's slaughter is anticipated to be 54,000 head. This week's total slaughter is estimated at 663,000 head -- 4,000 head more than a week ago and 114,000 head more than a year ago.

Boxed beef prices closed lower: choice down $0.03 ($269.59) and select down $1.23 ($264.85) with a movement of 161 loads (105.07 loads of choice, 28.33 loads of select, 16.91 loads of trim and 10.76 loads of ground beef). Throughout the week choice cuts averaged 269.88 (down $6.43 from last week) and select cuts average $266.02 (down $5.52 from last week) and the week's total movement of cuts, grinds, and trim totaled 634 loads.

TUESDAY'S CASH CATTLE CALL: Steady. So much of next week's fate will depend on how many cattle packers bought with time. To feedlots' advantage is that processing speeds are running aggressively which is helping keep showlists current. But packers are padding their inventory each and every week to avoid being at the mercy of the cash market fully.

FEEDER CATTLE:

Nearby feeder cattle futures dogged lower as the corn and soybean markets closed mildly higher ahead of the weekend, and the live cattle complex lent no support. The feeder cattle contracts of May 2022 through November 2022 closed higher as the market fully anticipates there will be fewer calves to market this year and, with the market entering a bull run, buyers are expected to come-a-runnin'. March feeders closed $0.77 at $165.42, April feeders closed $0.30 lower at $170.85 and May feeders closed $0.17 higher at $175.90. At Napoleon Livestock Auction in Napoleon, North Dakota, compared to last week, on a run of 4,853 head, feeder steers weighing 450 to 900 pounds traded $1.00 to $6.00 higher with instances up to $10.00 higher, except those weighing 650 to 700 pounds, which traded steady to $3.00 lower. Feeder heifers weighing 450 to 800 pounds traded $2.00 to $7.00 higher with instances up to $13.00 stronger. The CME Feeder Cattle Index 2/17/2022: steady, $162.14.

LEAN HOGS:

Heading into the weekend, the question on everyone's mind regarding the hog market is: "How high do pork prices have to get before consumers start to back away?" The rally in pork cutout values has been fast and furious, and with supplies of hogs likely to remain thin, a dive in pork prices isn't expected any time soon. The lag in production this past week in pork processing speeds hasn't been because of plant issues, but rather because there aren't enough hogs to go round. April lean hogs closed $1.82 higher at $109.40, June lean hogs closed $2.02 higher at $113.35 and July lean hogs closed $1.42 higher at $117.52. Pork cutouts totaled 316.10 loads with 272.56 loads of pork cuts and 43.54 loads of trim. Pork cutout values: up $10.02, $116.54. Friday's slaughter is estimated at 474,000 head -- steady with a week ago and 10,000 head less than a year ago. Saturday's slaughter is estimated to be around 162,000 head. Thursday's slaughter was revised to 451,000 head -- 14,000 head less than what was originally stated. The CME Lean Hog Index 2/16/2022: up $0.90, $94.24.

TUESDAY'S CASH HOG CALL: Steady. Packers have been aggressive in the middle part of the week for a while now. It's likely they let Tuesday come and go and then get busy buying more hogs.

Friday Midday Livestock Market Update - Cattle Trade Sideways, Mixed While Hogs Hustle Market

GENERAL COMMENTS:

The cattle complex hasn't been very lively nor inspiring thus far Friday, but the lean hog complex continues to muster support and surge higher. With pork cutout prices holding mostly steady, the market is getting enough fundamental support to encourage robust technical trade. March corn is up 5 cents per bushel and March soybean meal is up $0.60. The Dow Jones Industrial Average is down 219.46 points and NASDAQ is down 160.83 points.

LIVE CATTLE:

Live cattle futures are unwilling to test resistance at $148, so the sideways/lower chop continues. February live cattle are down $0.30 at $143.10, April live cattle are down $0.95 at $145.82 and June live cattle are down $0.67 at $141.47. Friday's movement has been light thus far with the boxed beef report only noting 75 loads. Next Tuesday, the market will see another USDA Cold Storage report and it will be interesting to know where supplies sit ahead of the big beef demand that usually comes with the summer months. The cash cattle market hasn't seen any renewed interest and its looking like the majority of this week's business is done. Asking prices for cattle left on showlists are around $143 in the South and $228-plus in the North.

Boxed beef prices are lower: choice down $2.39 ($267.20) and select down $0.58 ($264.27) with a movement of 75 loads (48.51 loads of choice, 10.37 loads of select, 10.78 loads of trim and 4.95 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures are mixed -- lower in its nearby contracts, but stronger in the deferred months. March feeders are down $0.90 at $165.30, April feeders are down $0.80 at $170.35 and May feeders are down $0.32 at $175.40. The grain complex is subject to change based on weather and any developments with Ukraine/Russia, but prices further into 2022 are significantly lower than today's market. The feeder cattle complex knows opportunity is laced through all of the 2022 market, but it's likely the latter part of the third quarter and fourth quarter of 2022 hold substantial opportunities for feeders as supplies become extremely thin.

LEAN HOGS:

The lean hog market continues to keep with its higher climb and with cash prices holding strong and pork cutout values trading mostly steady, fundamentals are supporting the move. April lean hogs are up $0.57 at $108.15, June lean hogs are up $0.62 at $117.82 and July lean hogs are up $0.82 at $116.92. Processing speeds have lagged over the last two days, and it wouldn't be surprising to see Friday's estimated slaughter weaker too as packers want to meet the market's need but they also know hustling too much will cost them as cash prices will rise.

The projected CME Lean Hog Index for 2/16/2022 is up $0.90 at $94.24, and the actual index for 2/15/2022 is up $1.50 at $93.34. Hog prices average $85.81, ranging from $82.00 to $100.00 on 2,556 head and a five-day rolling average of $85.79. Pork cutouts total 105.54 loads with 92.46 loads of pork cuts and 13.08 loads of trim. Pork cutout values: down $0.75, $115.79.

Friday Morning Livestock Market Update - Cattle Consolidation Ahead of the Extended Weekend

GENERAL COMMENTS:

The excitement of cash cattle trading ran its course on Wednesday with prices $2.00 higher. Cash business Thursday followed the same course leaving futures trading lethargic. Traders had some positive news from the weekly export sales report showing sales of 23,000 mt, but it was not enough to stimulate strong buying interest in futures. Feedlots are now setting their sights on next week with some apprehension due to packers already having an amount of cattle forward contracted for the next few weeks and continued weakness of boxed beef prices. Choice cuts were down $0.03 and select cuts were down $1.23. However, with strong demand and increased slaughter pace, it may not make much difference. Futures are likely to coast into extended holiday weekend. Markets are closed on Monday in observance of President's Day.

Hog futures were on fire again Thursday, pushing to new contract highs. There was no cash price released Thursday on the National Direct Afternoon report due to low volume cash trading activity, but traders could see very strong cutout prices developing, which triggered renewed buying interest. Cutouts jumped $10.02 with loins gaining $11.37 and hams up $25.22. If this is any indication of what me may see as the year progresses, fasten your seat belt. However, we know that high prices cure high prices and that a market generally falls faster than it increases. Weekly export sales of 18,300 mt were mothing to write home about, but at least there is international demand. Futures are overbought and will be watch closely by technical traders. Saturday hog slaughter looks to be around 160,000 head.

	BULL SIDE		BEAR SIDE
1)	Higher cash this week should raise hopes for steady to higher cash next week. Increase slaughter requires more animals to be purchased.	1)	Cattle futures have been consolidating. Prices are having a difficult time breaking out to the upside, which may be building stronger price resistance.
2)	Demand for feeders and calves is strong, which bodes well for later prices. Cattle feeders see tighter supplies as time progresses and are positioning themselves to supply that demand later in the year.	2)	Cattle weights have increased, possibly indicating some backup of supply. Feedlots might be anxious to move these cattle limiting cash potential in the near term.
3)	New contract highs in hog futures keeps bringing traders into the market. This provides confidence to buy even at these historically high prices.	3)	Hog futures are overbought and ripe for a price correction. Some pressure might be seen today ahead of the three-day weekend.
4)	The large jump of cutouts indicates strong demand that packers will want to fill. This will keep them aggressive in the cash market.	4)	Packers may not be very aggressive in the cash market. Three days of strong gains in futures are generally met with some profit taking, which may take place Friday.

Thursday Closing Livestock Market Update - Hogs Charge Higher

GENERAL COMMENTS:

It was a tremendous day for the hog market, but the cattle complex didn't close with the same gusto. Live cattle futures chopped sideways, yearning for support, and feeder cattle futures closed lower on higher grain prices. Hog prices were unavailable on the National Direct Afternoon Hog Report due to confidentiality, but we can see that 3,365 head sold and that the five-day moving average now sits at $88.45. March corn is up 3 cents per bushel and March soybean meal is down $0.20. The Dow Jones Industrial Average is down 622.24 points and NASDAQ is down 407.38 points.

LIVE CATTLE:

Live cattle futures continued to chop sideways through Thursday's trade despite seeing a supportive export report and more cash cattle trade. Part of the market's inability to push any higher is that while the February contract may have a few more trading days left, most of the spot market's attention is now on the April contract. That said, April leads with a significant premium to the following contracts, until you get to December 2022. Cattlemen and traders alike see this premium and are being cautious in how they're handing the summer 2022 contracts. February live cattle closed $0.27 higher at $143.40, April live cattle closed $0.15 lower at $146.77 and June live cattle closed $0.10 lower at $142.15. The futures market could take on the long-term resistance that looms, but it would need immense cash support. And while pushing the market $1.00 or $2.00 higher is attainable in the short term, soon packers are going to pump the brakes on the cash market gains as they have cattle committed with time and intend to use those inventories to limit the cash market advancement. There was some more trade that developed in parts of Nebraska at $226 and $143 live, and in parts of Texas for $142 -- both fully steady with the week's trend. It's looking like the bulk of this week's trade is done. Thursday's slaughter is estimated at 122,000 head -- 1,000 head less than a week ago and 13,000 head more than a year ago.

Thursday's actual slaughter data shared that for the week ended 2/5/2022, steer carcasses averaged 930 pounds (up two pounds from a week ago and up 11 pounds from a year ago), heifer carcasses averaged 854 pounds (steady with a week ago and six pounds heavier than a year ago).

Beef net export sales of 23,000 metric tons (mt) for 2022 were up 18% from the previous week and up 38% from the prior 4-week average. The three largest buyers were South Korea (10,100 mt), Japan (7,200 mt) and Canada (1,600 mt).

Boxed beef prices closed lower: choice down $0.03 ($269.59) and select down $1.23 ($264.85) with a movement of 161 loads (105.07 loads of choice, 28.33 loads of select, 16.91 loads of trim and 10.76 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady. Given that the week's trade is all but done, any more trade will likely be clean up in nature and steady with the rest of the week's business.

FEEDER CATTLE:

Higher corn, higher soybeans and a sideways chopping live cattle complex led the feeder cattle contracts to a lower close. March feeders closed $1.25 lower at $166.20, April feeders closed $1.02 lower at $171.15 and May feeders closed $0.82 lower at $175.72. Technically speaking, the market simply didn't have the support it needed to push the futures higher. But from a fundamental standpoint, the market sees the cash cattle market's $2.00 advancement as long-term encouragement. At Winter Livestock in Dodge City, Kansas, compared to last week, yearling steers and heifers weighing 550 to 950 pounds sold steady to $3.00 lower. Steer calves weighing 400 to 550 pounds traded $6.00 to $10.00 higher. Heifer calves weighing 400 to 550 pounds sold $3.00 to $5.00 higher. Demand was called excellent on cattle under 550 pounds and moderate on cattle over 550 pounds. Slaughter cows traded $3.00 lower and slaughter bulls sold steady. The CME Feeder Cattle Index 2/16/2022: down $0.45, $162.14.

LEAN HOGS:

Upon absorbing the immense support the pork cutouts provided, the futures shot higher and closed above the market's previous resistance. At midday, pork cutout values were up $11.04, so I figured they'd be higher in the afternoon report. But I didn't see a $10.02 jump -- wow! April lean hogs closed $2.17 higher at $107.57, June lean hogs closed $2.22 higher at $117.17, and July lean hogs closed $2.10 higher at $116.10. Tuesday and Wednesday were big days for the cash hog market, and upon securing enough supply for their short-term needs, packers left the cash market high and dry come Thursday as the country didn't even see enough hogs trade for USDA to be able to report prices without breaching confidentiality. There's been a dip in pork production over the last two days, which could end up driving pork prices even higher as demand is high (HIGH HIGH) amid short supplies and other meats are expensive. Pork cutouts total 316.10 loads with 272.56 loads of pork cuts and 43.54 loads of trim. Pork cutout values: up $10.02, $116.54. Thursday's slaughter is estimated at 465,000 head -- 8,000 head less than a week and year ago. Wednesday's hog slaughter was revised to 472,000 head -- 6,000 head less than what was originally stated. The CME Lean Hog Index 2/15/2022: up $1.50, $93.34.

Thursday's actual slaughter data shared for the week ended 2/5/2022 live hog weights averaged 293 pounds (down 1 pound from a week ago) and dressed carcasses averaged 218 pounds (up 1 pound from a week ago).

Pork net export sales of 18,300 mt for 2022 were up 1% from the previous week but down 46% from the prior 4-week average. The three largest buyers were Mexico (4,800 mt), South Korea (3,400 mt) and Japan (3,300 mt).

FRIDAY'S CASH HOG CALL: Steady. There could be a little more trade in Friday's cash market than what Thursday saw, but it's unlikely it will be much more. Given that plants are running a tick slower at the end of this week, packers aren't going to want to buy more hogs amid waned production.