GENERAL COMMENTS
Traders weren't interested in sticking around and trading the livestock contracts through Friday's end, which ultimately led all three of the livestock contracts to a lower close. The cash cattle market saw a little more trade in the North, but mostly the market only saw some sparse clean up trade develop as all prices were steady with Thursday's business. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.08 with a weighted average of $74.47 on 5,844 head. March corn is up 1 1/4 cents per bushel and March soybean meal is up $12.70. The Dow Jones Industrial Average is up 700.53 points.
From Friday to Friday, the livestock contracts made the following changes: February live cattle down $1.13, April live cattle down $1.13; January feeders down $1.00, March feeders down $0.57; February lean hogs down $7.43, April lean hogs closed $5.65; March corn down $0.25, May corn down $0.24.
LIVE CATTLE:The live cattle complex drifted through Friday's market, not able to gain trader attention nor advance the cash market anymore. The market was able to round out Friday's trade with a stronger note in boxed beef prices, which will help feedlots next week in their quest for higher cash prices once again. So long as the market continues to see strong boxed beef prices, packers will be incentivized to run steady chain speeds to ensure that they'll be able to market as much product as they're able to during these times of strong box prices. This helps feedlots too as they'll be able to keep progressing the cash market so long as packers see dividends to be made from selling beef. February live cattle closed $0.57 lower at $156.77, April live cattle closed $0.60 lower at $160.67 and June live cattle closed $0.72 lower at $156.55. The cash cattle market saw a little bit more trade developed in the North at $252, which was steady with the week's earlier business. Throughout the week, Southern live deals have been marked at $157, which is steady with last week's weighted average, and Northern dressed cattle have traded for mostly $252, which is $0.50 higher than last week's weighted average.
Friday's slaughter is estimated at 125,000 head, 3,000 head more than a week ago and 14,000 head more than a year ago. Saturday's slaughter is expected to be around 53,000 head. This week's slaughter is estimated at 563,000 head, 16,000 head more than a week ago and but 56,000 head less than a year ago.
Beef net sales reductions of 6,900 mt for 2022 were primarily for Japan (2,200mt), South Korea (1,900 mt), and China (1,000 mt).
Boxed beef prices closed higher: choice up $1.36 ($282.99) and select up $2.39 ($259.34) with a movement of 108 loads (76.24 loads of choice, 8.68 loads of select, 11.55 loads of trim and 11.02 loads of ground beef). The choice/select spread sits at $23.65. Throughout the week, choice cuts averaged $283.62 (up $3.54 from last week) and select cuts averaged $256.83 (up $8.19 from last week) and the week's total movement of cuts, grinds and trim totaled 494 loads. The week's choice/select spread averaged $26.79.
MONDAY'S CATTLE CALL: Higher. Trade won't develop until late in the week but when it does, it's likely to be higher yet again.
FEEDER CATTLE:The feeder cattle complex didn't achieve much technically throughout Friday's marketplace as traders paid the market little attention. Even so, the sheer fact that sale barns are seeing as much demand as they are, it likely means that next week's market will have to come to terms with the building momentum. Corn prices will continue to be a driving factor in feeders' upward momentum. If the corn complex faces much more pressure like it did this week, feeders stand an excellent chance at again trading significantly higher. The closer we get to spring and the more moisture the countryside receives, will directly influence how strong feeder cattle prices get. January feeders closed $1.10 lower at $182.70, March feeders closed $0.90 lower at $185.65 and April feeders closed $0.70 lower at $189.82. At Billings Livestock Commission in Billings, Montana, compared to their last sale mid-December, steer calves sold mostly $5.00 to $10.00 higher on all offerings. Heifer calves under 500 pounds sold mostly steady, but heifers over 500 pounds traded $7.00 to $10.00 higher. A large winter storm has much of the northern plains buried in snow and has packers searching for cows for immediate harvest. Slaughter cows sold mostly $5.00 to $9.00 higher on all classes. Feeding cows sold $2.00 to $4.00 higher. Slaughter bulls traded $10.00 to $12.00 higher. Feeder cattle supply over 600 pounds was 44%. The CME Feeder Cattle Index for Jan. 5: up $0.14, $180.46.
LEAN HOGS:The lean hog complex performed terribly throughout the week as the market posted a slow and painful regression. The biggest limiting factor in today's lean hog market is demand. Where will demand come from? And when will it come? Unfortunately, this week's market didn't lay to rest those lingering questions that the market continues to dance with, and next week's market could be faced with the same bleak outlook. February lean hogs closed $2.25 lower at $80.27, April lean hogs closed $1.87 lower at $89.65 and June lean hogs closed $1.30 lower at $104.70. Pork cutouts totaled 281.21 loads with 252.01 loads of pork cuts and 29.20 loads of trim. Pork cutout values: down $0.32, $84.00. Friday's slaughter is estimated at 453,000 head, 32,000 head less than a week ago and 2,000 head more than a year ago. Saturday's slaughter is projected to be around 420,000 head. The CME Lean Hog Index for Jan. 4: down $0.80, $78.26.
Pork net sales reductions of 51,900 mt for 2022 were primarily for Mexico (21,800 mt), Japan (9,200 mt) and South Korea (5,800 mt).
MONDAY'S HOG CALL: Lower. Until packers see better interest in pork cutouts, the cash market isn't expected to do much.
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