GENERAL COMMENTS:
Livestock futures prices were mostly in the red at the end of Friday's trading session, with a few triple-digit losses. Lean hog futures kept up a heavy volume of profit-taking sales for the second-straight day. On the National Direct Afternoon Hog Report, negotiated prices were down $1.45 to a weighted average price of $100.87 on 3,980 head, and the 5-day rolling average was $104.02 per cwt. Cash cattle trade was quiet Friday afternoon with the business done for the week. Southern live trade has been marked at mostly $138, fully steady with the bulk of last week's deals. Northern dressed transactions have had a wide range of $219 to $228, mostly $222 to $225, roughly $1 to $4 higher than last week's weighted average basis Nebraska. May corn moved down 13 3/4 cents per bushel to $7.35 and May soybean meal was down $17.50 per ton to $450. The Dow Jones Industrial Average is up 139.79 points, and the NASDAQ is up 22.72 points.
From Friday to Friday, livestock futures scored the following changes: April live cattle down $1.82; June live cattle down $1.53; April feeder cattle unchanged; May feeder cattle up $0.80; April lean hogs down $6.18; June lean hogs down $5.40.
LIVE CATTLE:
Despite all the turmoil in the outside markets this week, the live cattle market seemed to keep its eye steadily on the prize of firm beef demand, and futures traders mostly followed the lead of countryside cash trade, which stayed steady with last week, or made weekly gains for some higher-grading dressed deals. The April futures contract closed $0.725 lower at $138.65, the June closed $1.275 lower at $135.85, and the August closed $1.175 lower at $136.90. When grocery shoppers are eager to buy 80% lean ground beef at over $5 per pound, and spring and summer grilling season hasn't even fired up yet, we should consider this market to be generally well-supported, and there doesn't seem to be an immediate threat of the market falling back to its early March lows in the low 130's.
Friday's slaughter was seen at only 109,000 head, which is 5,000 head fewer than a week ago but 5,000 more than a year ago. Saturday's slaughter is estimated at 40,000 head, bringing the weekly total to 639,000, 20,000 below the prior week, but 36,000 greater than 2021.
Boxed beef prices were mixed Friday: choice down $1.25 ($267.14) and select up $0.18 ($262.52) with a movement of 100 loads (76.72 loads of choice, 6.37 loads of select, 7.77 loads of trim and 8.96 loads of ground beef).
MONDAY'S CASH CATTLE CALL: It's unlikely to see much business take place Monday, but as the showlists get put together, asking prices will be underpinned by the firm tone of the past two weeks at $138 live in the South and $222 or better dressed in the North.
FEEDER CATTLE:
Deferred feeder cattle futures contracts showed weakness through Friday's trading session, perhaps as traders kept their focus on the projection for fewer acres to be planted to corn in 2022, and the new-crop corn futures contract kept inching toward the $7 handle, getting as far as $6.91 Friday. The April feeder cattle contract closed up $0.175 at $161.575, the May contract closed down $0.425 at $166.125, and further out, the October contract closed down $1.125 at $180.70. Where there have been feeder cattle sales this week, the market is staying either steady or $5 to $10 higher than last week with light supplies and good or very good demand, especially for grass-type animals at this time of year, even in the droughty West. For instance, the Billings Livestock Commission Thursday Cattle Auction saw active bidders at a large sale where 550-799 lb. steers sold for an average $214 per cwt, and the best demand was seen for cattle suitable to run on grass and for high-quality replacement heifers.
LEAN HOGS:
Spread trading kept the nearby lean hog contracts moving lower Friday while the deferred contracts churned higher. The nearby April lean hog futures contract closed Friday down $0.45 at $101.30; the May closed down $0.40 at $113.175; and the June closed down $0.175 at $120.45. Trading volume was fairly evenly distributed across the calendar, suggesting Friday's activity wasn't just speculators following along with whatever the outside markets are doing, although the hog market's sensitivity to the general economy shouldn't be discounted. A stronger U.S. dollar may be putting pressure on exported pork prices, and crude oil falling below $100 per barrel on Friday gave the whole commodity sector a "risk-off" mood. In the real world of buying animals to process for meat, however, prices for hogs have slipped from day-to-day this week ($100.87 per cwt Friday), but sow prices are climbing above $95 per cwt, demonstrating how demand for some styles of pork products are perhaps seeing more resilient demand than others at elevated price levels. Friday's afternoon pork cut-out report showed the overall carcass value down $4.12 to $103.60, with 207.13 total loads (177.88 loads of cuts and 29.25 loads of trim). The CME Lean Hog Index for 3/30: down $0.53, $103.13, and the projected Index for 3/31 is down $0.50, $102.63.
MONDAY'S CASH HOG CALL: Steady to $1 lower. Uncertainty in volatile prices for certain pork cuts lately may be adding to packers' conservatism as they approach the market for hogs.
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