Friday Midday Livestock Market Summary - Can the Live Cattle Market Keep This Pace Through Closing?

GENERAL COMMENTS:

Live cattle futures are taking on Friday's trade with a full-steam-ahead approach. The market is seeing April live cattle trade at $140 and the June live cattle contract attempt to take on the market's resistance at the 100-day moving average. May corn is down 13 cents per bushel and May soybean meal is up $2.30. The Dow Jones Industrial Average is down 29.60 points and NASDAQ is up 153.14 points.

LIVE CATTLE:

Live cattle futures are aggressively advancing Friday as the April contract is again at $140 and the June contract is on the verge of tackling the 100-day moving average. Support from the cash cattle market has greatly helped the futures complex gain strength and momentum. This week's trade is a picture-perfect example of how the cash cattle market can be influential when packers are pressed to participate. It's evident packers are short bought as they purchased cattle for $1.00 to $4.00 higher than last week's market -- which comes as a bitter pill for them to swallow. Seeing how Friday's slaughter fares will be a clue as to how many cattle packers will need next week. There's a chance the day's slaughter will average around 120,000 head -- but also a chance the day only turns 115,000 head. Packers have indicated they are planning to take some time to perform cooler cleanings, which helps them in the long term because it buys them time to stall the cash cattle market when supplies of cattle are thin. But at the same time, boxed beef prices are starting to trend higher, and when money is on the table packers rarely walk away from it. The cash cattle market has yet to see any renewed interest; if we are going to trade a significant number of cattle, there needs to be some more trade ahead of the week's end. So far this week, Southern live trade has been at mostly $138, steady with last week's weighted averages. Northern dressed sales have been at mostly $221, $1 higher than last week's weighted average basis Nebraska.

Boxed beef prices are higher: choice up $2.56 ($259.61) and select up $0.83 ($251.51) with a movement of 52 loads (31.05 loads of choice, 12.28 loads of select, 3.15 loads of trim and 5.89 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures are continuing to rally into Friday afternoon as the market is delighted to see weaker trade throughout the grain sector and is thankful for the added support from both the live cattle contracts and the cash cattle market. March feeders are up $0.67 at $157.22, April feeders are up $1.60 at $162.70 and May feeders are up $2.05 at $167.92. The market is still well below both the 40- and 100-day moving averages, so technical pressure isn't a worry for Friday's trade. The retreat of grain prices could also signal an opportunity for buyers to pick up some feeder cattle or calves as spring will be here before we know it and their options of placing them in feedlots or hopefully having enough grass to graze becomes a decision that will need to be made sooner rather than later.

LEAN HOGS:

The lean hog complex is attempting to claw its way higher and join the cattle contracts, but the nearby contracts are pushing back against the notion. April lean hogs are steady at $100.35, June lean hogs are down $0.82 at $116.15 and July lean hogs are down $0.67 at $115.70. The market doesn't appear to be comfortable with breaking out of its sideways chop, so instead the nearby contracts are keeping with the week's sideways trend and thus far have ignored the day's strong fundamentals. With both cash hog prices higher and pork cutout values showing commendable interest, the market shouldn't struggle to trend on the higher side of the week's sideways drift, but traders aren't buying the idea.

The projected CME Lean Hog Index for 3/17/2022 is up $0.59 at $101.36 and the actual index for 3/16/2022 is up $0.36 at $100.77. Hog prices are higher on the Daily Direct Hog Report, up $1.27 with a weighted average of $103.71 ranging from $98.00 to $112.00 on 3,280 head and a five-day rolling average of $102.19. Pork cutouts total 104.03 loads with 93.72 loads of pork cuts and 10.32 loads of trim. Pork cutout values: up $4.71, $109.91.