GENERAL COMMENTS:
Friday closed with a number of new things for Monday's market to work through. The lean hog complex saw tremendous support through Friday's end and will be anxious to see the Quarterly Hogs and Pigs Report on Wednesday. The cattle contracts, unfortunately, have a different set of outcomes to sort through. With Friday's Cattle on Feed Report being bearish, the cash cattle market will likely feel the pressure.
Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $2.27 with a weighted average of $108.84 on 3,588 head. May corn is up 5 3/4 cents per bushel and May soybean meal is up $2.00. The Dow Jones Industrial Average is up 153.30 points and NASDAQ is down 22.54 points.
From Friday-to-Friday, livestock futures scored the following changes: April live cattle down $0.03, June live cattle up $0.30; March feeder cattle down $0.57, April feeder cattle down $0.75; April lean hogs up $8.08, June lean hogs up $9.78.
LIVE CATTLE:
The futures complex closed mixed with the nearby contracts higher but some of the deferred contracts lower. With Friday's Cattle on Feed data coming in substantially higher than a year ago, feedlots know in the short term there will be plenty of cattle for packers to pick through and prices are likely to suffer. It's important to know and understand today's Cattle on Feed data, but it's equally as important to understand that beef exports are booming, and once the calf-fed fats of last year get worked through, feedlots are going to have to hustle the market in order to get enough cattle to refill their bunks. The cash cattle market didn't see much interest in Friday's trade as the bulk of the week's business was already done. Throughout the week, Southern live cattle traded for $138 (steady) and Northern dressed cattle traded for mostly $221, which is steady to $1.00 weaker than last week. Most of the cattle that traded in the North are set for delivery for the week of April 4. April live cattle closed $0.80 higher at $140.47, June live cattle closed $0.42 higher at $137.37 and August live cattle closed $0.42 at $138.12.
Friday's slaughter is estimated at 114,000 head -- 14,000 head more than a week ago and steady with a year ago. Saturday's kill is projected to be around 57,000 head -- 13,000 head more than a week ago and 3,000 head less than a year ago. This week's slaughter is estimated at 659,000 head -- 15,000 head more than week ago and 10,000 head more than a year ago.
Boxed beef prices closed mixed: choice up $0.23 ($262.64) and select down $0.45 ($252.14) with a movement of 76 loads (51.02 loads of choice, 7.47 loads of select, 6.32 loads of trim and 11.48 loads of ground beef). Throughout the week choice cuts averaged $261.02 (up $3.69 from last week) and select cuts averaged $252.47 (up $2.40 from last week) with total movement of cuts, grinds, and trim totaling 534 loads.
MONDAY'S CASH CATTLE CALL: Lower. It's likely that cash cattle trade lower next week as the COF report will pressure the market.
FEEDER CATTLE:
It was a tough week for the feeder cattle contracts and with pressure likely to hit the market hard and fast Monday thanks to Friday's Cattle on Feed report, the sideways trade may see a downward trend next week. April feeders closed $1.15 lower at $161.57, May feeders closed $1.17 lower at $165.32 and August feeders closed $1.15 lower at $178.45. The problem with Friday's COF report for feeders is that with on-feed numbers totaling 12,199,000 head (which is up 1% from a year ago and the highest March 1 inventory since 1996) the report blankets the nearby market with concern and leads ranchers to wonder how much demand there will be for their calves in early summer sales. But what we cannot lose sight of is that BEEF COWS ARE BEING LIQUIDATED AT RECORD SPEEDS. The market will have a glut of cattle to process this spring/summer, but then feedlots are going to have to get scrappy to refill their bunks as the 2022 calf crop is going to be significantly lower. Marketing calves this year will come down to timing and not losing sight of the big picture despite the pressures of the day. At Napoleon Livestock Auction in Napoleon, North Dakota, compared to last week on a run of 3,033 head, feeder steers weighing 550 to 650 pounds traded $7.00 to $12.00 lower, those weighing 650 to 700 pounds and those weighing 750 to 800 pounds both traded steady to $5.00 lower. Feeder heifers weighing 550 to 700 pounds and those weighing 750 to 800 pounds traded $4.00 to $9.00 lower, but heifers weighing 700 to 750 pounds traded steady to $3.00 higher. The CME Feeder Cattle Index 3/24/2022: up $0.13, $154.82.
LEAN HOGS:
The lean hog complex had an amazing week. Pork cutouts gained $4.95 through the week, the cash market saw tremendous interest from packers every day expect Monday, and the futures contracts exploded higher. It's amazing how supply-and-demand mechanics work and how they can influence the market to unforeseen highs when customers are hungry and willing to pay up for product. April lean hogs closed $4.70 higher at $107.47, June lean hogs closed $3.77 higher at $125.85 and July lean hogs closed $3.42 higher at $125.30. While it's easy to look at the contracts and be in awe of their jolt to new highs, it was equally as thrilling to watch packers hustle the cash market time and time again this past week to ensure that they had enough hogs committed on their books. Next Wednesday the market will see the latest Quarterly Hogs and Pigs report, which could give insight as to how long this run of thin supplies will last. Pork cutouts totaled 272.31 loads with 230.93 loads of pork cuts and 41.38 loads of trim. Pork cutout values: up $1.89, $109.90. Friday's slaughter totaled 460,000 head -- 10,000 less than a week ago and 19,000 head less than a year ago. Saturday's slaughter is projected to be around 57,000 head -- 1,000 head less than a week ago and 81,000 head less than a year ago. The CME Feeder Cattle Index 3/23/2022: up $0.29, $101.50.
MONDAY'S CASH HOG CALL: Steady. The fact is there's too much money on the line for packers to not have enough hogs committed for their upcoming kills.
No comments:
Post a Comment