GENERAL COMMENTS:
It was another strong day for the lean hog complex as its contracts continued to rally and the market saw a huge number of cash hogs trade. Meanwhile, the cattle contracts closed slightly higher but seeing cash cattle trade for steady money wasn't exactly what feedlots had hoped for. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.54 with a weighted average of $107.14 on 11,462 head. May corn is up 4 3/4 cents per bushel and May soybean meal is up $8.30. The Dow Jones Industrial Average is down 448.96 points and NASDAQ is down 186.22 points.
LIVE CATTLE:
The cash cattle market saw trade develop in both the North and the South for steady money, which comes as disappointing news to bull-spreaders. With feedlots having very little time left to push prices higher ahead of the glut of cattle coming in the early part of May, each and every week plays a vital role in pushing prices higher before packers take full control of prices this summer. But just as every coin has two sides, feedlots are not only concerned with prices but also currentness. To some, pushing prices higher is the sole focus, and to others liquidating inventory ahead of the wave of cattle to come is equally as important, even if that means for steady money. Southern live cattle traded for $138 which is considered fully steady with last week, and Northern dressed cattle sold for $221 to $223, but mostly at $221, which is steady to somewhat weaker than last week. Most of the cattle that sold in the North are set for delivery for the week of April 4. April live cattle closed steady at $139.42, June live cattle closed $0.27 higher at $135.97 and August live cattle closed $0.22 higher at $137.15.
Wednesday's slaughter is estimated at 124,000 head -- 1,000 head less than a week ago and 2,000 head more than a year ago.
Wednesday's Cold Storage Report showed total pounds of beef in freezers up 1% from the previous month and up 4% from last year
The Fed Cattle Exchange Auction listed a total of 3,634 head (Iowa 1,325 head, Texas 1,215, Nebraska 480 head, Kansas 344 head, California 270 head), of which none actually sold; 1,060 were scratched from the auction and 2,574 head were listed as unsold, as they did not meet the reserve prices, that ranged from $138 to $144. Opening prices were $137; high bids ranged from $137 to $138.
Boxed beef prices closed higher: choice up $1.63 ($261.60) and select up $1.35 ($253.24) with a movement of 113 loads (80.36 loads of choice, 16.13 loads of select, 4.33 loads of trim and 12.41 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady. With cattle having traded in both regions, it's likely the week's prices are set.
FEEDER CATTLE:
The feeder cattle contracts closed slightly higher despite the grain contracts keeping with their aggressive momentum through the day's end as well. It helped that the cash cattle market developed trade at steady money, and that the live cattle contracts closed slightly higher. And while the market did close slightly higher, it still kept within its sideways chop and didn't break outside the trading range. April feeders closed $1.20 higher at $161.77, May feeders closed $0.37 higher at $165.80 and August feeders closed $0.30 higher at $179.15. At OKC West Livestock Auction in El Reno, Oklahoma, compared to last week on a run of 5,487 head feeder steers traded steady to $2.00 higher and feeder heifers traded steady to $2.00 lower. Steer and heifer calves sold fully steady, and largely the renewed interest in grass cattle came as last week the region got some much-needed moisture. The CME Feeder Cattle Index 3/22/2022: down $0.16, $154.97.
LEAN HOGS:
Even though cash hog prices and pork cutout values dipped lower by Wednesday's close, it's equally as important to note that over 11,000 hogs traded in Wednesday's cash market (very impressive) and until Lent is over hit-and-miss consumer demand is expected for pork protein. The lean hog contracts had no struggle in closing higher as the market found ample support technically and, even though cash prices dipped and pork cutout values close slightly lower, the market's fundamentals still had supportive undertones as noted above. April lean hogs closed $2.30 higher at $102.55, June lean hogs closed $2.90 higher at $122.97 and July lean hogs closed $2.77 higher at $122.60. The bigger question is: What's going to happen next? Will limited supplies of market-ready hogs help sustain these prices? Or will higher pork prices drive consumers away amid unbridled inflation? It's tough saying which outcome is more likely, but with all goods seeing price increases, consumers still must find their protein somewhere and pork remains a good option. Pork cutouts total 299.00 loads with 259.06 loads of pork cuts and 39.94 loads of trim. Pork cutout value: down $0.32, $106.39. Wednesday's slaughter is estimated at 478,000 head -- 2,000 head less than a week ago and 10,000 head less than a year ago. The CME Lean Hog Index 3/21/2022: down $0.03, $101.77.
Wednesday's Cold Storage Report showed frozen pork supplies up 11% from the previous month but down 1% from a year ago. Stocks of pork bellies were up 12% from last month and up 34% from last year.
THURSDAY'S CASH HOG CALL: Steady to somewhat higher. Wednesday's cash trade took a good number of hogs out of the market and if any packers are short bought, they'll likely have to pay higher prices to get the hogs they need bought.
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