GENERAL COMMENTS:
The livestock complex faced some pressure Friday and largely the cattle complex didn't have much luck in rallying. But both the deferred live cattle and lean hog contracts walked into the weekend slightly higher. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.28 with a weighted average of $82.36 on 4,884 head. March corn is up 9 1/4 cents per bushel and March soybean meal is up $2.60. The Dow Jones Industrial Average is down 503.53 points and NASDAQ is down 394.49 points.
From Friday to Friday livestock futures scored the following changes: February live cattle down $0.18, April live cattle down $0.70; March feeder cattle down $0.13, April feeder cattle down $0.72; February lean hogs up $3.47, April lean hogs up $2.15.
LIVE CATTLE:
The deferred contracts were able to walk into the weekend with slightly higher gains, but the nearby contracts fought resistance until the bitter end. February live cattle closed $0.47 lower at $141.87, April live cattle closed $0.70 lower at $146.17 and June live cattle closed $0.47 lower at $141.12. The market will be watching closely come Monday to see how many cattle were bought this past week and to see specifically how many cattle were bought for deferred delivery. Friday's cash cattle market didn't see much interest, as the bulk of its trade had already been completed. This week Northern dressed trade has ranged from $222 to $227, mostly $224, $2 higher than last week's weighted averages. Southern live transactions have had a range of $138 to mostly $140, generally steady with last week's weighted averages.
Friday's slaughter is estimated at 120,000 head -- 6,000 head more than last week and 13,000 head more than a year ago. Saturday's slaughter is anticipated to be around 51,000 head. The week's total slaughter is estimated at 659,000 head -- 20,000 head more than a week ago and 53,000 head more than a year ago.
Boxed beef prices closed lower: choice down $0.30 ($274.52) and select down $1.12 ($267.83) with a movement of 61 loads (37.54 loads of choice, 10.12 loads of select, 3.93 loads of trim and 9.11 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady. Next week's cash cattle trade will be interesting to watch. This week's slaughter was extremely aggressive and so, from a simple supply and demand standpoint, packers are going to need cattle. But they were strategic in this week's market and were able to get some cattle bought with time, which hinders the cash market's ability to rally in the weeks ahead.
FEEDER CATTLE:
Thursday afternoon commodities markets turned lower and the feeder cattle complex wasn't able to muster strength Friday. March feeders closed $0.50 lower at $166.22, April feeders closed $1.05 lower at $170.70 and May feeders closed $1.12 lower at $174.75. Early in the week, feeder cattle futures traded confidently. But by Thursday's close the market lost some of its gusto. Throughout sale barns this past week buyers continued to make their way to the rings and sought calves/feeders aggressively despite the spike in feed prices. Still, buyers are clinging to the opportunity that lays in the latter half of the year and are trying to take full advantage of the market while supplies favor their position. At Winter Livestock Auction in Pratt, Kansas, compared to last week on a run of 4,950 head feeder steers weighing 700 to 950 pounds traded $2.00 to $5.00 higher. Steer calves weighing 400 to 700 pounds sold $10.00 to $15.00 higher. Feeder heifers weighing 450 to 900 pounds traded $4.00 to $10.00 higher with the biggest advancements made in the five-weights. Slaughter cows and bulls traded $8.00 to $10.00 higher. The CME Feeder Cattle Index 2/10/2022: down $0.09, $162.64.
LEAN HOGS:
Lean hog futures tried to rally into Friday's close, and some of the deferred contracts did accomplish that mission. But the nearby contracts still faced a stiff headwind. April lean hogs closed $1.20 lower at $102.22, June lean hogs closed $1.32 lower at $112.20 and July lean hogs closed $1.05 lower at $111.60. The trajectory of the short-term market largely rests on demand from consumers. The charts have grown and achieved new price thresholds, but now the market is going to need to see follow-through support from the fundamentals in order to keep trading higher. The pork cutout closed sharply higher, but anymore seeing wide sings in the cutout market isn't unusual. Pork cutouts total 281.91 loads with 247.23 loads of pork cuts and 34.69 loads of trim. Pork cutout values: up $8.48, $109.96. Friday's slaughter is estimated at 474,000 head -- 14,000 head more than a week ago and 7,000 head less than a year ago. Saturday's slaughter is anticipated to be around 144,000 head. The CME Lean Hog Index 2/9/2022: down $0.52, $87.74.
MONDAY'S CASH HOG CALL: Steady. Packers are likely to be cautious in Monday's cash market as they want to see where demand and technical support stands before diving into too many hogs and driving prices higher.
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