It was a mixed day for the livestock contracts. The feeder cattle market rallied amid a weak grain complex, the lean hog complex closed mixed as the nearby contracts saw interest, but the deferred contracts did not, and the live cattle complex had a rather disappointing day as the futures market skewed lower. Hog prices closed higher on the Daily Direct Hog Report, up $0.86 with a weighted average of $107.73 on 7,195 head. May corn is down 28 cents per bushel, and May soybean meal is down $6. The Dow Jones Industrial Average is up 518.76 points, and the NASDAQ is up 487.93 points.
LIVE CATTLE:The live cattle complex swung a tough one at Wednesday's market, but fearful bear-spreaders stood strong and demanded the market skate lower. It's extremely disappointing to see the live cattle contracts close lower after having two powerful, well-supported days earlier in the week. But the bigger question now is, what does this mean? One option could be that the market is headed back lower, as the resistance of the 100-day moving average is simply too much for the market to withstand. Or the market could trade sideways until summer pressures give the market no other option but to trade lower. Nevertheless, Wednesday's disappointing performance took some of the energy out of the market's bullish hopes. April live cattle closed $1.50 lower at $139.35, June live cattle closed $1.27 lower at $135.52 and August live cattle closed $0.80 lower at $136.50. A handful of cattle traded in Wednesday's cash cattle market but certainly not enough to establish any type of noteworthy trend just yet. Feedlots hate seeing the board's weak performance, as it emboldens packers' quest to keep the cash market depressed. Still, feedlots are pushing for higher prices, as they know more dollars should be finding their way into their margins. Asking prices in the South sit at $142 live, and dressed cattle are priced at $224.
Wednesday's slaughter is estimated at 125,000 head -- steady with a week ago and 10,000 head more than a year ago.
The Fed Cattle Exchange Auction listed a total of 1,352 head (Texas 838 head, Iowa 230 head, Kansas 150 head, California 134 head), of which none actually sold. All 1,352 head were listed as unsold, as they did not meet the reserve prices, which ranged from $140 to $142. Opening prices were at $138, high bids ranged from $138 to $140.
Boxed beef prices closed higher: choice up $0.18 ($258.08) and select up $1.43 ($250.27) with a movement of 123 loads (85.28 loads of choice, 15.76 loads of select, 6.20 loads of trim and 15.80 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady. With Wednesday's weak technical performance, it's likely that prices see steady trade. I hope feedlots can achieve higher prices, but with packers cutting shifts this week for cooler cleanings, it's more likely that steady prices are seen..
FEEDER CATTLE:With the grain complex closing fully lower, the feeder cattle complex mustered up enough support of its own (without the backing of the live cattle complex) to round out the day mostly higher. March feeders closed $0.90 higher at $157.25, April feeders closed $0.02 higher at $162.62 and May feeders closed $0.02 lower at $167.27. The market is still well below both the 100-day and 40-day moving averages, and so, technical resistance isn't an issue. The market simply needs to continue to see weakness from the grain complex to keep its upward quest, as managing cost of gains will be a full-time job in 2022. At Winters Livestock Auction in La Junta, Colorado, compared to last week on a run of 2,831 head, feeder steers under 500 pounds traded mostly steady, steers weighing 500 to 600 pounds traded $3 to $5 lower, steers weighing 600 to 800 pounds traded $3 to $5 lower with some instances of $8 lower, and steers over 800 pounds traded steady. Feeder heifers under 500 pounds traded $3 to $5 lower, heifers weighing 500 to 600 pounds traded $5 to $8 softer, heifers weighing 600 to 700 pounds sold steady and those over 700 pounds traded $2 higher. The CME feeder cattle index 3/15/2022: up $0.33, $153.14.
LEAN HOGS:The lean hog complex closed mixed again with most of the market's nearby contracts closing modestly higher while its deferred contracts scaled lower. The nearby lean hog contracts are trapped trading sideways as the market plays a game of cat-and-mouse with pork cutout prices and the futures contracts. If pork cutout prices close higher, then traders feel a little more confident. But if prices wane lower, traders become apprehensive about emboldening the market without a fundamental support. April lean hogs closed $0.02 lower at $102.37, June lean hogs closed $0.40 higher at $120.47, and July lean hogs closed $0.30 higher at $119.45. Pork cutouts totaled 294.05 loads with 258.20 loads of pork cuts and 35.85 loads of trim. Pork cutout values: up $0.54, $105.02. Wednesday's slaughter is estimated at 480,000 head -- 2,000 fewer head than a week ago and 16,000 fewer head than a year ago. The CME lean hog index 3/14/2022: down $0.36, $100.49.
THURSDAY'S CASH HOG CALL: Steady. Given how thin supplies are of hogs, it's likely that Thursday's market sees interest again.
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