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.
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