The actual values of animals and meat products in the U.S. haven't been instantaneously changed by this new war in Ukraine. Cash cattle, for instance, saw light trade Thursday fully steady with last week's weighted averages: $142 Southern live basis. On the National Direct Afternoon Hog Report, prices were down $6.97 to a weighted average price of $88.13 on 3,100 head, but base prices ranged widely between $85 and $101.50. The futures markets are, of course, more sensitive to the global panic of the day, and Thursday's dramatic chart action will carry a long-term legacy that will either last as the pivot point putting an end to the past month's upward trend or require some serious correction in the coming days. March corn is up 11 1/4 cents per bushel to $6.95 and March soybean meal is down $6.20 per ton to $464.90. The Dow Jones Industrial Average closed up 91 points and the NASDAQ closed up 465 points.
LIVE CATTLE:Light cash cattle trade developed midday Thursday in the South with live deals marked at $142, fully steady with last week's weighted averages and following up on Wednesday's light-to-moderate dressed trade at $227 in the North (for delivery the week of March 7). More business will still likely need to take place Friday and asking prices remain around $144 to $145 in the South and $229 to $230 in the North. Evidently neither one day of panicky futures trade (the April contract closed down $2.45 at $142.30) or the dwindling boxed beef prices have seriously dented the resilient nuts-and-bolts of this industry that still needs to get a steady volume of fat cattle moving from feedlots into packing facilities. Steer and heifer slaughter weights have dropped substantially this week, down 12 pounds to only 918 pounds for the average steer and down 6 pounds to only 848 pounds for the average heifer, emphasizing the urgency to source relatively high volumes of market-weight animals.
Thursday's slaughter was seen at a hefty 124,000 head, which is 2,000 head more than a week ago and 3,000 more than a year ago.
Boxed beef prices closed lower again and are dipping below price levels last seen in December 2021: choice down $1.64 ($259.24) and select down $4.41 ($254.55) with a movement of 170 loads (106.51 loads of choice, 21.31 loads of select, 9.75 loads of trim and 32.41 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Packers may take the spooked futures losses as a license to push back on prices despite the bullish momentum that cash traders have been able to amass in recent weeks. That's in contrast to asking prices around $144 to $145 in the South and $229 to $230 in the North, which, if realized, would represent a week-over-week gain of $2.00 to $3.00.
FEEDER CATTLE:Feeder cattle futures are the poster child of what can go wrong when a futures market has relatively low open interest most days and then one sudden rush of trading volume on a panicky day. The nearby March contract closed down $3.675 at $159.10, leaving a big chart gap between $162.625 and $160.30, which traders may someday go back and fill in. The April contract, after opening the day down $6.25, ultimately closed down $4.475 at $163.80. Trading volume for that April contract was roughly double the average day. There are many outside market influences that could take the blame for this sudden collapse -- a dramatically higher U.S. Dollar Index amid widespread financial market panic, or the lower-then-schizophrenically-higher stock market -- but most will be pointing the finger at the feed markets. Nearby corn futures traded as much as 35 cents higher Thursday (limit up) before ending the day up "only" 11 1/4 cents at $6.95. A $7 handle on cash corn is never going to look great for the cattle-feeding business, so it remains to be seen whether any or all of these markets can regain some kind of calmer equilibrium when trade resumes Friday. The CME Feeder Cattle Index for 2/22: up $0.13, $162.26, and it has been reliably steady through the past week.
LEAN HOGS:Lean hog futures moved lower Thursday, mostly in sympathy with the volatile cattle futures trade, but perhaps also sensing a timely opportunity to take a rest from their seemingly inexhaustible upward momentum seen since January. The April contract closed down $2.50 at $105.525, the May contract closed down $2.525 at $110.125, and all the deferred contracts also posted losses of at least $0.475 at the close. The higher U.S. dollar and its implications for export pork prices could dampen some of the fundamental bullishness that's been feeding this market's trend of higher prices. However, other than currency fluctuations, the new Russian war doesn't seem like it will have much direct impact on global pork trade. Russia used to import about a third of its pork, but now after a decade-long strategic boost in production, Russia has in the past couple of years reached self-sufficiency. Here at home, wholesale pork prices roared higher Thursday, led by volatile ham values: the afternoon pork cut-out report showed prices up $5.01 to $114.13, with 265.63 total loads (232.16 loads of cuts and 33.47 loads of trim). The CME Lean Hog Index for 2/22: unchanged, $98.16, and the projected Index for 2/23 is down $0.12, $98.04.
FRIDAY'S CASH HOG CALL: Steady. Continued higher momentum in pork prices will support packers' business model, but winter weather could cause some logistical hiccups.
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