GENERAL COMMENTS:
After this week there's no denying the markets knows how it feels to take a royal beating. And what's incredibly frustrating about this matter is the markets caved on one thing and one thing only. Not because of supply and demand issues; and not because of fundamental signals; but solely because of war.
As a side note, I think it's also important to note that USDA announced another case of HPAI (highly pathogenic avian influenza) has been detected in a commercial broiler flock of chickens in Stoddard County, Missouri.
Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $3.01 with a weighted average of $97.41 on 4,889 head. May corn is up 6 1/2 cents per bushel and May soybean meal is up $7.00. The Dow Jones Industrial Average is down 179.86 points and NASDAQ is down 224.50 points.
From Friday-to-Friday livestock futures scored the following changes:
April live cattle down $6.15, June live cattle down $5.78; March feeder cattle down $6.90, April feeder cattle down $7.50; April lean hogs down $3.22, June lean hogs down $2.13.
LIVE CATTLE:
From Friday's start to the day's last second, the live cattle contracts traded lower with not a hope in sight for stronger prices. To see April now trading at $135.77, it's sickening to realize just how quick a market can lose its foothold. With April now trading at $135.77, the market has fallen to prices not last seen since October 2021. And when prices collapse like this, we cannot overlook the psychological toll it has on the market, which in the weeks to come will be evident in the cash cattle market's performance. April live cattle closed $2.57 lower at $135.77, June live cattle closed $2.62 lower at $132.52 and August live cattle closed $1.50 lower at $134.15. Friday saw just a little bit of clean-up trade, but everything traded for steady prices with the week's trend. Throughout the week, Southern live cattle traded for $140 ($2 lower) and Northern dressed cattle sold for $225 mostly ($2 lower).
Friday's slaughter is estimated at 123,000 head -- 4,000 head more than a week ago and 14,000 head more than a year ago. Saturday's slaughter is projected to be around 42,000 head. The week's slaughter is estimated to total 658,000 head -- 11,000 head more than a week ago but 8,000 head less than a year ago.
Boxed beef prices closed mixed: choice down $0.02 ($254.33) and select up $0.62 ($248.41) with a movement of 112 loads (60.13 loads of choice, 14.56 loads of select, 6.87 loads of trim and 30.78 loads of ground beef). Throughout the week choice cuts averaged $255.72 (down $5.11 from last week) and select cuts averaged $250.49 (down $8.39 from last week) with a movement of 639 loads of cuts, grinds and trim.
MONDAY'S CASH CATTLE CALL: Lower. Packers will undoubtedly take this week's weakness and use it against feedlots in the weeks to come.
FEEDER CATTLE:
To be blunt, it was a brutal week for the feeder cattle complex. With Ukraine being a big grain producer, the grain complex soared as worries over what's going to happen to Ukraine's grain supplies sent fear throughout the market. And with the grain contracts rallying hand over fist, the feeder cattle complex adopted tunnel vision and solely fixated on the war, which sent its contracts tumbling lower. Heading into next week's trade, the market can only hope somehow Russia gets shut down and the markets can once again focus on something other than war. March feeders closed $3.22 lower at $153.12, April feeders closed $3.27 lower at $157.25 and May feeders closed $3.15 lower at $162.35. At Winter Livestock in Pratt, Kansas, compared to last week on a run of 6,734 head, feeder steers weighing 700 to 975 pounds traded steady to $4.00 lower. Steers weighing 550 to 700 pounds traded $4.00 to $6.00 higher. Steer calves weighing 400 to 550 pounds traded unevenly steady. Feeder heifers weighing 700 to 950 pounds traded $4.00 to $6.00 lower. Heifers weighing 500 to 700 pounds sold $2.00 to $4.00 higher. Slaughter cows and bulls sold $4.00 to $5.00 higher. The CME Feeder Cattle Index 3/3/2022: down $1.59, $156.19.
LEAN HOGS:
Friday wasn't just a bit of bad luck for the lean hog contracts, but it was a "Knocking on Closing $5 Lower" kind of bad day. The lean hog complex attempted to chop sideways earlier in the week, but as the pressures of the week grew the market ended up trading lower. When traders decided to turn the market red, they did so in a hurry. April lean hogs closed $4.75 lower at $100.45, June lean hogs closed $4.75 lower at $105.75 and July lean hogs closed $4.72 lower at $110.70. Watching prices in the cash hog market was wild Friday afternoon. The nation's weighted average closed at $97.41, but Iowa/Minnesota shared averages of $105.37, the Western Corn Belt shared averages of $104.57, and prices in the Eastern Corn Belt weren't shared. And one more note ahead of the week's close: China's Ministry of Agriculture and Rural Affairs has shared that a recurrence of African swine fever has been detected in the Xinjiang region. Long story short -- take the weekend and rest up as next week will likely be hell again. Pork cutouts totaled 257.89 loads with 212.13 loads of pork cuts and 45.77 loads of trim. Pork cutout values: down $2.42, $103.99. Friday's slaughter is estimated at 478,000 head -- 7,000 head more than a week ago and 8,000 head less than a year ago. Saturday's slaughter is projected to be around 59,000 head. The CME Lean Hog Index 3/2/2022: down $0.14, $99.70.
MONDAY'S CASH HOG CALL: Steady. Supplies of hogs are thin and even though Lent doesn't end until April 14, there are still plenty of consumers hungry for pork cuts.
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