GENERAL COMMENTS:
It was an exhilarating day for the lean hog futures complex as prices jolted higher, but the rest of the livestock complex had a mundane Monday with not much transpired. Heading into Tuesday's trade, the cash cattle market could see where feedlots pin their early asking prices for the week. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.61 with a weighted average of $102.09 on 4,560 head. May corn is up 14 1/2 cents per bushel and May soybean meal is up $4.30. The Dow Jones Industrial Average is down 201.94 points and NASDAQ is down 55.38 points.
LIVE CATTLE:
The live cattle market complex pitter-pattered through Monday's trade and ended up not doing a whole lot of anything as the nearby contracts closed lower and the deferred contracts closed slightly higher. As traders look at this week's market, they look to the June contract and see the market's resistance at the 100-day moving average and grow concerned. If cash prices show gusto, then traders may feel apt to take a slightly stronger position, given that boxed beef prices are also trading higher. But if the cash cattle market shows no sign of a strong backbone, then the weight of the market's resistance will likely send traders trailing lower. Given that supplies of market ready cattle are manageable now, and only going to grow more come May, feedlots are gunning for higher prices, but know that won't be an easy feat. It's likely that trade doesn't develop until Wednesday or later this week. New showlists appear to be mixed, higher in Kansas, but lower in Texas and Nebraska/Colorado.
Monday's slaughter is estimated at 119,000 head -- 6,000 head fewer than a week ago and 3,000 head more than a year ago. April live cattle closed $0.45 lower at $140.05, June live cattle closed $0.72 lower at $136.35, and August live cattle closed $0.32 lower at $137.27.
Last week's negotiated cash cattle trade totaled 74,899 head. Of that, 78% (58,202 head) were committed for the nearby delivery, while the remaining 22% (16,697 head) were committed for the deferred delivery.
Boxed beef prices closed higher: Choice was up $0.34 ($258.50) and select up $1.85 ($252.50) with a movement of 90 loads (52.92 loads of choice, 14.70 loads of select, 4.25 loads of trim and 18.16 loads of ground beef.
TUESDAY'S CASH CATTLE CALL: $1 to $2 higher. Given that packers ended up paying steady to higher prices last week, I tend to believe that they'll be able to move the cash cattle market higher again this week as packers are short bought and want to capture the higher boxed beef prices.
FEEDER CATTLE:
With the grain markets posting a strong rally in Monday's market, the feeder cattle contracts had little hope to close higher by day's end. April feeders closed $1.12 lower at $161.20, May feeders closed $1.70 lower at $165.75 and August feeders closed $1.55 lower at $179.15. The day-to-day pressure -- or lack thereof -- will continue to stem from the grain sector; and while signals from the live cattle market and cash cattle market are important, it likely wouldn't have enough pull on the market to help feeders trade higher when grain prices are stressing producers' bottom line. It was encouraging to see strong interest from buyers at sale barns on Monday; with green grass not that far away, buyers could be looking to get into cattle if they've got pasture already committed. At Joplin Regional Stockyards in Carthage, Missouri at the sale's mid-session point, compared to last week, on a run of 6,000 head the feeder steers were trading $2 to $6 stronger and feeder heifers were trading $5 to $8 higher. The CME feeder cattle index for March 18, 2022: up $0.08, $154.93.
LEAN HOGS:
The lean hog market contracts ripped into Monday's trade ready to take on the market's resistance and while the complex came close to flirting with the contracts' top prices, the summer 2022 contracts didn't see a new high by Monday's close. April lean hogs closed $1.22 higher at $100.62, June lean hogs closed $3.75 higher at $119.82, and July lean hogs closed $3.72 higher at $119.20. The big question the market will have to answer in the days to come is whether or not this spike in prices will be sustained. Cash prices didn't see a jump in demand, and pork cutout values closed lower, so this move came solely from the market's technical side of things. Next week the market will see the latest data from the Quarterly Hogs and Pigs report, which will help the market better understand its short- and long-term trajectory. Pork cutouts totaled 305.93 loads with 268.94 loads of pork cuts and 36.99 loads of trim. Pork cutout values: down $3.34, $101.61. Monday's slaughter is estimated at 478,000 head -- 12,000 head more than a week ago and 6,000 head fewer than a year ago. Friday's slaughter was revised to 470,000 head. The CME lean hog index for March 17, 2022: up $0.59, $101.36.
TUESAY'S CASH HOG CALL: Steady. Given that pork cutouts didn't close higher, and that Monday's cash market didn't see much aggression, packers could wait to see what demand looks like early this week before they aggressively chase after hogs.
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