GENERAL COMMENTS:
Thursday served as a wild ride through the entire marketplace as both livestock and grain commodities were higher heading into the afternoon, but then took an abrupt turn and rounded out the day fully lower as traders looked to capture some profit-taking on overbought markets. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.87 with a weighted average of $82.64 on 4,027 head. March corn is down 5 cents per bushel and March soybean meal is down $7.90. The Dow Jones Industrial Average is down 526.47 points and NASDAQ is down 304.73 points.
LIVE CATTLE:
Live cattle futures closed lower along with the rest of the livestock complex, but the biggest punch the market took was from the fact that packers were able to buy cattle with time in this week's cash cattle market. There was a light trade of cattle in the North from $220 to $227, though mostly at $224, which is $2.00 higher than last week's business. But a large percentage of those cattle were committed for delivery on the week of Feb. 21. Some more trade developed in the South for $138 to mostly $140, which is mostly steady with last week's business. We knew at some point packers were going to put the brakes on the cash cattle market's rally and they did this week with securing their out-front needs. The good news of the day was that Thursday's slaughter came in extremely aggressive at 123,000 head, which will help clean up front-end supplies of market-ready cattle. February live cattle closed $0.55 lower at $142.35, April live cattle closed $0.95 lower at $146.87 and June live cattle closed $0.87 lower at $141.60. Thursday's slaughter is estimated at 123,000 head -- 6,000 head more than a week ago and 8,000 head more than a year ago.
Beef net export sales of 19,500 metric tons (mt) for 2022 were down 3% from the previous week and 63% from the prior 4-week average. The three primary buyers were Japan (8,600 mt), South Korea (7,300 mt) and Canada (1,000 mt).
Thursday's actual slaughter data shared that for the week ended 1/29/2022 steers averaged 928 pounds, which is up three pounds from a week ago and up eight pounds from a year ago. Heifers for the same time averaged 854 pounds, which is up one pound from a week and year ago.
Boxed beef prices closed lower: choice down $0.97 ($274.82) and select down $3.10 ($268.95) with a movement of 158 loads (113.59 loads of choice, 17.86 loads of select, 9.48 loads of trim and 17.40 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady with the week's trend. Given that cattle have traded in both regions, it is likely the bulk of the week's business is done and only some spotty clean-up trade will develop Friday.
FEEDER CATTLE:
Even though the feeder cattle contracts closed lower, the bright side of the gloomy day's end is that the grain contracts closed lower too. March feeders closed $1.55 lower at $166.72, April feeders closed $0.82 lower at $171.75 and May feeders closed $0.85 lower at $175.87. At Kist Livestock Auction in Mandan, North Dakota, compared to a week ago on a run of 5,907 head feeder steers weighing 600 to 650 pounds traded $11.00 higher, and those weighing 650 to 800 pounds traded $2.00 to $8.00 stronger. Feeder heifers weighing 500 to 550 pounds sold $2.00 stronger, those weighing 600 to 650 pounds traded $2.00 lower and those weighing 700 to 750 pounds traded $6.00 higher. The market reported this could be one of the last big sales for the spring as the numbers on the farm appear to have moved to market earlier this year due to drought and feed concerns. The CME Feeder Cattle Index 2/9/2022: not available at this time.
LEAN HOGS:
What a day! The lean hog contracts ran into Thursday's early trade with a full head of steam, but as the noon hour approached the market began to taper off and ended up closing fully lower. Not only did the futures endure a big sell-off, but Thursday's export report didn't come with any grandiose news. China continues to be absent from the U.S. hog market as their prices are substantially cheaper. April lean hogs closed $1.35 lower at $103.42, June lean hogs closed $0.97 lower at $113.52 and July lean hogs closed $0.52 112.65. Pork cutouts totaled 241.64 loads with 208.30 loads of pork cuts and 33.34 loads of trim. Pork cutout values: down $3.36, $101.48. Thursday's slaughter is estimated at 473,000 head -- 57,000 head more than a week ago and 13,000 head less than a year ago. The CME Lean Hog Index for 2/8/2022: down $0.60, $87.22.
Pork net export sales of 18,100 mt were down 40% from the previous week and 71% from the prior 4-week average. The primary buyers were Mexico (10,500 mt), Japan (2,000 mt) and Canada (1,400 mt).
Thursday's actual slaughter data shared that for the week ended 1/29/2022 live carcass weights averaged 294 pounds (down one pound from the previous week) and dressed carcass weights fell by two pounds to average 217 pounds.
FRIDAY'S CASH HOG CALL: Lower. With it being the last trading day of the week, the futures market closing lower Thursday and pork cutout values down $3.36, it is not likely packers will be aggressive in Friday's trade.
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