GENERAL COMMENTS:
It's only Monday's midday point, and the market has been lively! The lean hog complex jumped $3.00 to $4.00 higher as the complex aims to take on looming resistance. Meanwhile the feeder cattle contracts are trending lower amid high grain prices and the live cattle market is trading on both sides of steady. May corn is up 21 1/4 cents per bushel and May soybean meal is up $3.70. The Dow Jones Industrial Average is down 220.26 points and NASDAQ is down 64.34 points.
LIVE CATTLE:
The April live cattle contract is still trading above $140, but the June live cattle contract still hasn't mustered up enough support to take on the 100-day moving average and blow past its resistance. With boxed beef prices trending fully higher, packers have a tightrope to walk until supplies of cattle turn in their favor. From now until the first part of May, supplies of market-ready cattle will remain thin, which gives feedlots an opportunity to potentially rally the cash cattle market. Packers are going to fight tooth and nail to hold the market as close to steady as possible, but with higher boxed beef prices, they want enough cattle in the pipe to capture consumer interest. Nevertheless, feedlots are expected to try to push the cash market higher again this week. Last week feedlots were well supported by a moderately supportive futures complex. We've yet to see how supportive this week's futures complex will be. April live cattle are down $0.05 at $140.45, June live cattle are down $0.22 at $136.85 and August live cattle are up $0.22 at $137.82. New showlists appear to be mixed, higher in Kansas, but lower in Texas and Nebraska/Colorado.
Last week's negotiated cash cattle volumes haven't been released yet -- they will be shared in closing comments.
Boxed beef prices are higher: choice up $1.26 ($259.42) and select up $1.94 ($252.59) with a movement of 42 loads (17.25 loads of choice, 8.39 loads of select, 4.25 loads of trim and 11.60 loads of ground beef).
FEEDER CATTLE:
With the grain complex posting a snappy rally to start the week off, the feeder cattle contracts have once again been given the signal to trade lower. April feeders are down $1.05 at $161.27, May feeders are down $1.25 at $166.20 and August feeders are down $1.37 at $179.32. With the pressures building from the grain sector and the nearby live cattle contracts lending no support, the feeder cattle contracts have secure ground to stand on. Last week throughout the countryside feeder cattle sold remarkably well, it will be interesting to see from Monday's large strings of calves and feeders how well buyer interest holds.
LEAN HOGS:
Midday pork cutout values are lower and morning cash prices are lower, yet the lean hog futures contracts are $3.00 to $4.00 higher. April lean hogs are up $1.67 at $101.97, June lean hogs are up $4.22 at $120.30 and July lean hogs are up $4.37 at $119.85. The market is seeing the most interest in the June 2022 through October 2022 contracts. Hog supplies are anticipated to remain thin through that time frame, and with warm weather approaching, the market may be rallying ahead of increased summer buying. Next week the market will receive the latest Quarterly Hogs and Pigs report which should help decipher both short- and long-term trajectories for the market.
The projected CME Lean Hog Index for 3/18/2022 is up $0.44 at $101.80, and the actual index for 3/17/2022 is up $0.59 at $101.36. Hog prices are lower on the Daily Direct Morning Hog Report, down $2.35 with a weighted average of $101.36, ranging from $98.00 to $110.00 on 4,175 head and a five-day rolling average of $102.38. Pork cutouts total 185.90 loads with 160.28 loads of pork cuts and 25.62 loads of trim. Pork cutout values: down $1.72, $103.23.
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