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.
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