GENERAL COMMENTS:
The markets closed mixed with the lean hog contracts rallying higher yet again. But the cattle contracts lost some of their muster through Monday's market. Heading into Tuesday, feedlots should post their asking prices for the week, and most are assuming that they will try to push the market higher again this week while the opportunity lasts. Hog prices closed lower on the National Direct Afternoon Hog Report, down $9.35 with a weighted average of $74.52 on 7,209 head. March corn is up 14 3/4 cents per bushel, and March soybean meal is up $8.90. The Dow Jones Industrial Average is up 1.39 points, and the NASDAQ is down 82.34 points.
LIVE CATTLE:
The live cattle complex closed lower Monday afternoon as traders look for direction from the cash cattle market and grew weary over grain prices. February live cattle closed $0.22 lower at $141.82, April live cattle closed $0.47 lower at $146.40 and June live cattle closed $0.27 lower at $141.10. Feedlots are encouraged to see that Monday's slaughter posted an aggressive 121,000 head -- which gives them assurance that they could potentially push the cash market higher again this week. The cash cattle market hasn't seen any interest yet, and it's likely this week's trade doesn't get underway until Wednesday or later. Asking prices haven't been established in either the North or South but could be shared sometime Tuesday. Monday's slaughter is estimated at 121,000 head -- 1,000 head more than a week ago and 8,000 head more than a year ago.
Last week's negotiated cash cattle trade totaled 98,188 head. Of that, 76% (75,030 head) were committed for nearby delivery, while the remaining 24% ($23,158 head) were committed for deferred delivery. Last week's volume of 98,188 head is 18,432 head more than a week ago, but still 4,320 head less than a year ago.
Boxed beef prices closed lower: choice down $0.85 ($278.96) and select down $1.01 ($275.04) with a movement of 80 loads (52.29 loads of choice, 12.86 loads of select, 4.68 loads of trim and 9.75 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: $1 to $2 higher. The cash cattle market knows that the pressure is on. The charts need to see strong fundamental support to keep trading higher, and feedlots know that packers are going to be hard to deal with given that boxes are tipping lower. But if the feedlot sector is going to regain any leverage, they are going to have to take it for themselves.
FEEDER CATTLE:
With grain prices rallying relentlessly, the feeder cattle contracts had a bit of a tough Monday, as input costs worried traders. March feeders closed $1.07 lower at $165.02, April feeders closed $1.15 lower at $170.27 and May feeders closed $0.62 lower at $174.72. Still, demand in the countryside held strong as the market sees potential in the months ahead, especially if the cash cattle market can regain leverage. At Joplin Regional Stockyards in Carthage, Missouri, compared to last week on a run of 2,239 head, feeder steers traded $4 to $7 higher, but most of the market's gains were on those weighing less than 550 pounds. Feeder heifers under 600 pounds traded $6 to $12 higher. The CME feeder cattle index 2/4/2022: down $0.03, $160.14.
LEAN HOGS:
The lean hog market kept with its upward surge throughout Monday's trade. April lean hogs closed $1.20 higher at $101.27, June lean hogs closed $0.95 higher at $110.37, and July lean hogs closed $0.55 higher at $109.70. Pork cutout values closed slightly higher, but the cash hog market took a strenuous fall. There were 7,209 head of hogs traded in the cash hog market, but Monday's weighted average fell $9.35 to $74.52. The stark, drastic changes in the cash hog market continue to be startling, and with supplies of market-ready hogs unlikely to increase anytime soon, these type of volatile price jumps could continue. Pork cutouts total 336.82 loads with 299.23 loads of pork cuts and 37.59 loads of trim. Pork cutout values: up $0.78, $98.19. Monday's slaughter is estimated at 481,000 head -- 6,000 head more than a week ago and 7,000 head less than a year ago. The CME lean hog index 2/3/2022: up $0.97, $84.30.
TUESDAY'S CASH HOG CALL: Steady. After falling abruptly on Monday, one would think that the cash market would stabilize with throughput seeming sufficient and demand remaining strong.
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