GENERAL COMMENTS:
It was a rough day for the cattle complex as both the live cattle and feeder cattle contracts mauled over Friday's Cattle on feed report. Meanwhile, the lean hog complex trended higher, but with both cash and pork cutout values being lower by Monday's close ,Tuesday's market could see some push back. Hog prices closed lower on the National Direct Afternoon Hog Report, down $2.95 with a weighted average of $105.89 on 8,425 head. May corn is down 5 1/2 cents per bushel and May soybean meal is down $9.00. The Dow Jones Industrial Average is up 94.65 points and NASDAQ is up 185.60 points.
LIVE CATTLE:
With Friday's Cattle on Feed report still weighing heavily on the market, the live cattle complex didn't stand much of a chance at closing higher ahead of Monday's closing bell. The irritating nature about the market right now is that it's all about timing. Feedlots have a very thin window from now until the first of May when they can regain some leverage in the cash market. Once the first of May arrives, calf-fed fats will begin to show up in the market and packers will have more cattle to pick and choose from than they'll know what to do with. At that point, feedlots' main priority will likely be throughput and keeping the market eroding the best it can. April live cattle closed $0.17 lower at $140.30, June live cattle closed $0.60 lower at $136.77 and August live cattle closed $0.82 lower at $137.30. The cash cattle market didn't see interest in Monday's trade, and it's likely that packers don't get serious about procuring cattle until Wednesday. New showlists appear to be mixed, higher in Nebraska/Colorado, but lower in Kansas and Texas. Monday's boxed beef report was interesting to sift through as both choice and select prices were higher, but select prices jumped $4.18 higher and the day's movement only amounted to a measly 71 loads. Monday's slaughter is estimated at 124,000 head, 5,000 head more than a week ago and 7,000 head more than year ago.
Last week's negotiated cash cattle trade totaled 91,241 head. Of that 81% (73,927 head) were committed for nearby delivery while the remaining 19% (17,314 head) were committed for deferred delivery.
Boxed beef prices closed higher: choice up $1.23 ($263.87) and select up $4.18 ($256.32) with a movement of 71 loads (41.06 loads of choice, 13.12 loads of select, 4.20 loads of trim and 12.25 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady to weaker. With packers buying 91,241 head last week, they could be quieter in this week's cash market.
FEEDER CATTLE:
The grain contracts kept their lower ascend through closing, but with Friday's Cattle on Feed report showing a spike in placements and total on-feed numbers, feeders grew weary and found very limited interest throughout Monday's trade. April feeders closed $0.75 lower at $160.82, May feeders closed $0.25 lower at $165.07 and August feeders closed $0.12 lower at $178.32. It's likely that this grim outlook keeps with the feeder cattle market until interest in early spring/summer sales starts to pick up or until moisture falls. Feeders need to see that there is indeed interest and demand for their cattle, and while we fundamentally understand that there will be a need in time (a big need thanks to the nation's smaller cowherd), getting through this time when cash cattle are pressured and grain prices are volatile is painful. At West Point Livestock Auction in West Point, Nebraska, compared to two weeks ago, steers over 550 pounds sold $3.00 to $4.00 lower and heifers sold $1.00 to $3.00 higher. Demand was good for light weight steers and heifers with moderate demand for heavier weight feeder steers. The CME Feeder Cattle Index for March 25: up $0.29, $155.11.
LEAN HOGS:
The lean hog complex closed with its nearby contracts trading just above steady and its deferred contracts modestly lower. With supplies of market-ready hogs not likely to grow burdensome any time soon, it seems as though the market is trading comfortably and confidently in its nearby contracts, but there isn't as much consensus about its deferred contracts. It's likely that in Wednesday's Quarterly Hogs and Pigs report, the market will gain some confidence as to what it may expect for the latter half of 2022. Tuesday's market could trend lower as both cash prices and pork cutout values closed lower, which could either mean that the market is stalling out after its aggressive rally, that it needs time to rest or that consumers are finding other proteins as pork prices have rallied. April lean hogs closed $0.10 higher at $107.57, June lean hogs closed $0.20 higher at $126.05 and July lean hogs closed $0.05 higher at $125.35. Pork cutouts total 269.81 loads with 235.85 loads of pork cuts and 33.96 loads of trim. Pork cutout values: down $2.49, $107.41. Monday's slaughter is estimated at 476,000 head, 8,000 head more than a week ago and 15,000 head less than a year ago. The CME Lean Hog Index for March 24: up $0.75, $102.25.
TUESDAY'S CASH HOG CALL: Steady. After packers aggressively chased last week's market, they could be bought up and not need to chase hogs as aggressively this week, especially if pork cutout values trend lower.
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