GENERAL COMMENTS:
Tuesday served as a reminder for both the live cattle and lean hog contracts that life will indeed go on. While we mourn for the people of Ukraine and cannot stomach the greed that Putin possesses, we must regain focus on the livestock contracts. I understand there are contracts (grain especially) that need to be up in turmoil as they're directly affected by the war in Ukraine; but the live cattle and lean hog contracts should be able to trade on. With the feeder cattle market dependent on corn, it's understandable why that market has yet to show any positive recovery. Hog prices closed higher on the National Direct Afternoon Hog Report, up $5.11 with a weighted average of $94.51 on 6,686 head. May corn is up 35 cents per bushel and May soybean meal is up $8.00. The Dow Jones Industrial Average is down 597.65 points and NASDAQ is down 218.94 points.
LIVE CATTLE:
Tuesday's live cattle trade came as a double-edged sword. It was nice to see the deferred contracts back to trade somewhat higher; but it's beyond aggravating to see the nearby contracts selling away as the market should be getting ready for its spring rally. April live cattle closed $0.90 lower at $140.52, June live cattle closed $0.65 lower at $137.05 and August live cattle closed $0.07 lower at $137.07. The April live cattle contract is now trading the lowest it has since the last week in January and will soon have to make a decision. The market could either rally at the support plane of $140.00, or it could continue to trend lower, feeling the geopolitical pressures of the world. Nevertheless, this volatility comes at a horrible time for the market as feedlots need to be pressing prices toward a spring rally. The cash cattle market didn't see any interest in its market today, but it's likely bids are lightly tossed at the market come Wednesday.
Tuesday's slaughter is estimated at 124,000 head -- 1,000 head more than a week and year ago.
Boxed beef prices closed lower: choice down $0.83 ($256.68) and select down $1.89 ($251.52) with a choice/select spread of $5.16 and a movement of 144 loads (82.11 loads of choice, 13.88 loads of select, 17.44 loads of trim and 30.37 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady to $1.00 higher. While the futures complex continues to be absorbed with Russia/Ukraine, the cash cattle market could demand higher prices as supplies favor their position.
FEEDER CATTLE:
Another day passed and another couple dollars lost in the feeder cattle complex. As the market continues to watch the grain complex rally to unfathomable highs, the feeder cattle market has no other option but to morn its sorrows and trade lower. March feeders are down $1.45 at $156.27, April feeders are down $2.20 at $159.80 and May feeders are down $2.55 at $165.25. If the live cattle market could lend some support, it would help the feeder cattle market's morale. But, overall, the pressures from the grain market are simply too great to bear right now. Until the situation with Ukraine and Russia simmers down, it's unlikely the nature of the feeder cattle market gets much better. The CME Feeder Cattle Index 2/28/2022: down $0.24, $159.67.
LEAN HOGS:
The lean hog complex served as a reminder that life will indeed go on for the markets -- as it always has. The lean hog complex found support in Monday's close and leaped higher throughout all of Tuesday's trade. April lean hogs closed $2.70 higher at $106.20, June lean hogs closed $3.35 higher at $116.77 and July lean hogs closed $3.05 higher at $116.02. Pork cutouts closed noticeably lower, but I doubt it worries the contracts in Wednesday's trade. Pork cutout prices could dip lower as Lent begins Wednesday. Pork cutouts total 291.31 loads with 264.76 loads of pork cuts and 26.55 loads of trim. Pork cutout values: down $4.08, $108.19. Tuesday's slaughter is estimated at 482,000 head -- 10,000 head more than a week ago and 12,000 head less than a year ago. Monday's slaughter was revised to 451,000 head -- 19,000 head less than what was originally stated. The CME Lean Hog Index 2/25/2022: up $0.69, $99.09.
WEDNESDAY'S CASH HOG CALL: Steady to somewhat higher. Packers have been aggressive for about two days in the cash market in weeks past. It's likely they are aggressive again in Wednesday's market.
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