GENERAL COMMENTS
It was a doggish day leading up to the Fed's interest rate announcement as traders were cautious ahead of the report's unveiling. Wednesday's interest rate hike is the Fed's ninth consecutive rate increase and with the federal-funds rate to range between 4.75% and 5%, which is the highest level since September 2007. Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.38 with a weighted average of $77.63 on 8,548 hogs. May corn closed up 3 1/2 at $6.335 and May soybean meal closed down $9.00 at $451.6. The Dow Jones Industrial Average is down 530.49 at 32,030.11.
LIVE CATTLE:
The live cattle complex closed lower as traders kept an arm's distance from the market as they waited to see how Wednesday's interest rate news would affect the markets. All in all, the markets were expected to trade as if they were sitting on pins and needles leading up to the announcement.
April live cattle closed $0.13 lower at $162.3, June live cattle closed $0.25 lower at $155.9 and August live cattle closed $0.08 lower at $155.975. Packers preyed on the market's vulnerability and casted out bids midmorning, which developed into trade around the noon hour. A light to moderate trade was reported in the South at $163, which is $1.00 lower than last week's weighted average. Northern dressed business traded from $264 to $265, which is steady to $1.00 higher than last week's weighted average. One would have hoped that the market would have waited to trade until later in the week when feedlots' likelihood of getting fully higher prices is greater, but at least the North saw steady to $1.00 higher trade.
Wednesday's slaughter is estimated at 126,000 head, steady with a week ago and 3,000 head more than a year ago.
Boxed beef prices closed mixed: choice up $1.38 ($281.3) and select down $1.73 ($269.82) with a movement of 146.84 loads (94.36 loads of choice, 12.95 loads of select, 11.66 loads of trim and 27.87 loads of ground beef).
THURSDAY'S CATTLE CALL: Steady. Given that trade has developed in both regions, it's likely that prices remain steady throughout the rest of the week.
FEEDER CATTLE:
The feeder cattle complex traded cautiously throughout most of Wednesday's market and closed lower as a lack of trader interest left the market with no other choice. Traders were leery of supporting the market before they saw what the Fed would do with interest rates and then they wanted to see how the market would react. As interest rates continue to rise, borrowing money for the ag sector will continue to be a topic that many focus on as it's becoming a bigger expense item on most operations' budgets. March feeders closed $0.53 lower at $188.25, April feeders closed $0.33 lower at $194.375 and May feeders closed $0.78 lower at $198.775.
At OKC West Livestock Auction in El Reno, Oklahoma, compared to last week, feeder steers sold steady to $3.00 higher while feeder heifers suitable for grazing under 700 pounds traded $1.00 to $3.00 higher and those over 700 pounds traded $3.00 to $4.00 lower. Steer calves sold $2.00 to $4.00 higher and heifer calves under 500 pounds sold $2.00 to $4.00 lower but heifers over 500 pounds sold steady. Feeder cattle supply over 600 pounds was 79%. The CME Feeder Cattle Index for March 21: down $0.09, $187.69.
LEAN HOGS:
Yet again, the lean hog market closes lower. Wednesday's double whammy of negative news comes in the form that, yet again, the futures complex closed lower, but cutouts also saw a significant decrease as well. The ham continues to be under pressure, which fell nearly $5.00 from Tuesday's cutout report. To put into perspective just how low the market is trading, the spot June contract is trading the lowest it's been since December 2021. Hopefully, Thursday's export report gives the market some hope that demand abroad is strong, but even if that is the case, prices won't likely react. June lean hogs closed $2.00 lower at $89.35, June lean hogs closed $2.00 lower at $89.35 and July lean hogs closed $1.93 lower at $91.4. Pork Cutouts totaled 349.27 loads with 305.04 loads of pork cuts and 44.23 loads of trim. Pork cutout values are down $1.66 at $79.86. Wednesday's slaughter is estimated at 478,000 head, 1,000 head less than a week ago and 4,000 head less than a year ago. The CME Lean Hog Index for March 20: down $0.88, $78.67.
THURSDAY'S HOG CALL: Lower. With pork demand on the rocks, it's unlikely that packers show the cash market too much more interest ahead of the weekend.
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