GENERAL COMMENTS:
Tuesday's market allowed livestock futures to all close higher and, with support seen both technically and fundamentally, the market stands a good chance at trading higher Wednesday as well. Thus far, cash cattle have traded $1.00 stronger in the South, but cattle have yet to trade in the North. Hog prices closed higher on the Daily Direct Hog Report, up $1.97 with a weighted average of $99.67 on 9,272 head. May corn is up 11 3/4 cents per bushel and May soybean meal is up $1.80. The Dow Jones Industrial Average is down 87.72 points.
LIVE CATTLE:
Moisture, a higher/supportive futures complex and higher cash cattle trade -- talk about a perfect storm for the live cattle market! It was another strong day for live cattle futures as they came close to taking on the 40-day moving average. April live cattle closed $1.42 higher at $139.95, June live cattle closed $1.50 higher at $136.30 and August live cattle closed $1.02 higher at $137.65. The Southern Plains saw light movement of cattle at $139, $1.00 higher than last week. Thin supplies of cattle in the North have given Northern feedlots the upper hand in this week's cash cattle market and thus far the North has yet to really trade cattle. With the supportive futures market and with slaughter running aggressively alongside higher boxed beef prices, Northern feedlots should have no problem getting at least $1.00 higher for their cattle this week, if not even $2.00.
Monday's slaughter is estimated at 125,000 head -- steady with a week ago and 8,000 head more than a year ago.
Boxed beef prices closed higher: choice up $1.36 ($273.47) and select up $0.42 ($260.71) with a movement of 115 loads (55.36 loads of choice, 19.93 loads of select, 29.14 loads of trim and 11.05 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. Given that the South has already seen trade $1.00 stronger when the North is the region with thin supplies, it wouldn't be surprising to see northern prices trade at least $1.00 stronger if not potentially even $2.00 higher than last week's market.
FEEDER CATTLE:
The grain complex closed higher but feeder cattle futures clung to the support from the live cattle market and opted to round out Tuesday's trade fully higher. April feeders closed $1.10 higher at $157.75, May feeders closed $1.02 higher at $160.92 and August feeders closed $0.45 higher at $173.75. Northern states are being affected by a winter storm and praying they can keep calves alive, all while getting as much snow as possible to offset the ongoing drought problems. Given where the market is regarding timing, you'll note that lighter weight calves aren't bringing as much because record on-feed numbers will glut the fed market through the summer and feeding lightweight calves out through the summer months is problematic with hot temperatures and the need to put on weight not converging well for feedlots. At Joplin Reginal Stockyards in Carthage, Missouri, compared to last week on a run of 7,054 head, feeder steers under 575 pounds traded $9.00 to $14.00 lower, but the heavier weights traded $3.00 lower. Feeder heifers under 600 pounds traded $4.00 to $7.00 lower with heavier weights $3.00 higher. The CME Feeder Cattle Index 4/11/2022: up $0.14, $155.81.
LEAN HOGS:
The lean hog complex wasn't joking around Tuesday as the market saw almost 10,000 head trade in the cash market, the nearby futures contracts closed over $3.00 stronger and pork cutout values walked away with a higher close as well. June lean hog closed $3.45 higher at $118.47, July lean hogs closed $3.42 higher at $119.82 and August lean hogs closed $2.87 higher at $118.27. Pork cutouts closed only slightly higher (up $0.16, $106.80) but the biggest jump was seen in ham prices (up $7.93 to $83.76) which isn't surprising given that this weekend is Easter. Pork cutouts totaled 305.39 loads with 263.70 loads of pork cuts and 41.69 loads of trim. Pork cutout values: up $0.16, $106.80. Monday's slaughter is estimated at 473,000 head -- 7,000 head less than a week ago and 10,000 head less than a year ago. The CME Lean Hog Index 4/8/2022: down $0.43, $99.63.
WEDNEDSAY'S CASH HOG CALL: Steady. Given that prices saw a significant increase Tuesday, I doubt packers want to chase the market to the point where prices get much stronger. It wouldn't be surprising to see another day or two of "big" cash trades in the hog market as come Monday some plants will be dark.
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