GENERAL COMMENTS:
Trading activity has been brisk throughout the livestock complex Wednesday morning as the markets peek out of their groundhog holes and see some fresh contract highs. April hogs, for instance, have pierced the psychologically significant $100 level, and nearby feeder cattle are up over $3.00 per cwt. March corn is down 11 cents per bushel and March soybean meal is down $1 per ton. The Dow Jones Industrial Average is up 60 points and NASDAQ is up 34 points.
LIVE CATTLE:
Midday gains of more than a dollar have pushed the April live cattle contract to another fresh contract high of $146.75 -- and the day's not over yet. The nearby February contract is up $1.025 at $141.325 and the deferred June contract is up $1.25 at $141.225, all amid active trade.
Inflated consumer prices continue to support the overall beef sector, although boxed beef prices have been starting to plateau, as there is always going to be some price at which grocery shoppers will start to balk. Choice prices are down $1.68 Wednesday morning ($283.76) and select down $0.16 ($280.06) with a movement of 72 total loads (55.55 loads of choice, 5.28 loads of select, 0 loads of trim and 11.26 loads of ground beef).
Cattle slaughter, estimated at 121,000 head Wednesday, shows packer chain speeds are on pace.
The Fed Cattle Exchange Auction on Wednesday listed a total of 1,759 head (Texas 1,007 head, Kansas 596 head, California 35 head, Oklahoma 121 head), of which 197 actually sold in Texas at $138.25, none were scratched from the auction and 1,562 head were listed as unsold, as they did not meet the reserve prices, that ranged from $137 to $140.50. Opening prices ranged from $136 to $137, high bids ranged from $137 to $138.25. That's in line with last week's cash cattle trade at mostly $137 in the South, but most showlist asking prices this week have moved above $140.
FEEDER CATTLE:
Feeder cattle futures were trading higher Wednesday even before the corn market collapsed by double digits, and now the party is really rocking. The March contract is up $3.025 at $166.725. But it's the deferred contracts that bear watching, especially after this week's Cattle Inventory report confirmed the country's diminished calf numbers (especially lightweight calf numbers). The April contract's next goal may be to take another run at its $173.50 high that was seen at the start of the year, but so far it has only reached as high as $171.875 Wednesday. USDA's daily ethanol report shows countryside DDGS with a price tag around $210 per ton, and with soybean meal testing levels above $440 per ton Wednesday, all the other feed markets are likely to stay frisky, too.
LEAN HOGS:
February 2 is a big day for groundhogs and all other hogs, too. Nearby February futures traded both sides Wednesday morning and are presently headed lower on their own. With a reprieve in the U.S. Dollar Index (lower Wednesday morning), the export-sensitive deferred hog contracts are instead moving higher toward impressive-sounding numbers, with the April contract now $1.40 higher at $99.075, and the May contract up $0.675 at $102.60. More trading volume may follow throughout the afternoon, particularly as packers and traders evaluate the logistical challenges from the winter storm currently hitting the Midwest and on its way to the Carolinas.
The projected CME Lean Hog Index for 2/1/2022 isn't available because of Tuesday's packer submission issues, but the last look at the actual index was $83.14 from 1/31. Pork cutouts Wednesday morning total 116.59 loads with 103.18 loads of pork cuts and 13.41 loads of trim. Pork cutout values: up $3.70, $96.67. Wednesday's hog slaughter is projected at a storm-challenged 440,000 head.
No comments:
Post a Comment