GENERAL COMMENTS:
When Friday rolled around traders looked to the livestock contracts and saw opportunity, which led to a day of higher trade for the live cattle, lean hog and feeder cattle contracts. But heading into next week's trade, the market still has to face the realities that challenged it earlier in the week. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $4.26 with a weighted average of $101.57 on 4,677 head. May corn is up 6 3/4 cents per bushel and May soybean meal is down $6.60. The Dow Jones Industrial Average is down 229.88 points and NASDAQ is down 286.15 points.
From Friday to Friday, livestock futures scored the following changes: April live cattle up $1.53, June live cattle up $0.42; March feeder cattle up $0.15, April feeder cattle up $0.72; April lean hogs up $2.28, June lean hogs up $6.43.
LIVE CATTLE:
If it's not one thing shorting the market's potential, it's another. Along with this week's depressed state thanks to Russia and the market's inability to focus on anything else, packers also decided it would be a good time to start cleaning some of their coolers. Isn't it ironic that when supplies of market-ready cattle are thin and packers "could" potentially need to step into the cash market more aggressively that it works out better for them to cut product and clean a cooler or two? Friday's slaughter is estimated at a measly 111,000 head and from multiple sources I've been told we can expect to see more cooler cleanings for at least the next three weeks. This too adds pressure to the cash cattle market and makes it hard for feedlots to trade cattle at steady, let alone higher prices.
April live cattle closed $1.40 higher at $137.30, June live cattle closed $0.50 higher at $132.95 and August live cattle closed $0.42 higher at $135.07. Throughout the week Northern dressed cattle sold for mostly $220, which is $4.00 cheaper than a week ago, and Southern live cattle sold for $138, which is $2.00 softer than a week ago.
Friday's slaughter is estimated at 111,000 head -- 12,000 head less than a week ago and 3,000 head less than a year ago. Saturday's slaughter is projected to be around 34,000 head -- 4,000 head less than a week ago and 18,000 head less than a year ago. This week's slaughter is estimated to total 644,000 head -- 10,000 head less than a week ago and 5,000 head less than a year ago.
Boxed beef prices closed higher: choice up $0.77 ($254.71) and select up $1.74 ($249.11) with a choice/select spread of $5.60 and a movement of 97 loads (58.58 loads of choice, 10.44 loads of select, 6.36 loads of trim and 22.09 loads of ground beef). Throughout the week choice cuts averaged $253.70 (down $2.02 from last week) and select cuts averaged $247.29 (down $3.21 from last week) and the week's total movement of cuts, grinds and trim totaled 668 loads.
MONDAY'S CASH CATTLE CALL: Lower. With packers cleaning coolers and sitting on committed inventory, the cash cattle market stands a little chance at trading cattle higher.
FEEDER CATTLE:
Corn prices rounded out the day slightly higher, but the feeder cattle contracts kept with their modest advancement to round out the day fully higher as well. March feeders closed $1.62 higher at $153.27, April feeders closed $1.72 higher at $157.97 and May feeders closed $1.92 higher at $163.72. As traders looked at the market, the support plane of $156 granted them the ability/option to either trade higher or keep digging at their lower demise. With resistant pressure from where the market is trading today, traders allowed the contracts to rally modestly ahead of the week's close. While the war with Russia/Ukraine continues, along with the rising cost of grain and worries about moisture, fuel prices have now dominated the market's chatter. Oklahoma's Weekly Cattle Auction Summary shared that throughout the state and when compared to last week, feeder steers sold $1.00 to $3.00 lower, and feeder heifers traded $2.00 to $4.00 softer. Steer calves sold $3.00 to $5.00 lower, and lightweights saw as much as a $15.00 dip in some cases. Heifer calves steadily traded $5.00 to $10.00 lower. The CME Feeder Cattle Index 3/10/2022: down $0.83, $153.06.
LEAN HOGS:
The market has spent most of the week chopping sideways, looking for support wherever the opportunity may arise. Throughout the week packers were notably more aggressive in the cash market as market-ready supplies of hogs continue to be thin, and that situation isn't likely to change in the months ahead. Meanwhile, with inflation stealing more and more of the consumers dollar, the pork cutout value has been pressured from a lack of buyers. Some of the pinch in pork cutout values is undoubtedly due to Lent. But some of the consumers are simply denying the product based on its price point. The stalled-out nature of the pork cutout value is likely to continue until Lent is done and summer buying picks up. April lean hog closed $2.62 higher at $102.72, June lean hogs closed $3.27 higher at $118.17 and July lean hogs closed $3.52 higher at $117.62. Pork cutouts totaled 222.82 loads with 186.70 loads of pork cuts and 36.12 loads of trim. Pork cutout values: down $1.65, $102.55. Friday's slaughter is estimated at 476,000 head -- 6,000 head more than a week ago and 11,000 head less than a year ago. Saturday's slaughter is projected to be around 97,000 head -- 38,000 head more than a week ago and 38,000 head less than a year ago. The CME Lean Hog Index 3/9/2022: up $0.26, $99.26.
MONDAY'S CASH HOG CALL: Slightly higher. This past week was a big one for the cash hog market. Packers were aggressive buyers and although Friday's pork cutout didn't close higher, I'd suspect that packers are aggressive in next week's market again.
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