GENERAL COMMENTS:
The lean hog contracts were able to close mildly higher, but the cattle complex kept with its mixed position through Monday's end. Moving throughout the week monitoring slaughter speeds, demand and weather remains crucial. Hog prices closed lower on the daily Direct Afternoon Hog report, down $0.09 with a weighted average price of $46.53 on 2,210 head. March corn is up 1/4 cent per bushel and March soybean meal is down $0.70. The Dow Jones Industrial Average is up 145.35 points.
LIVE CATTLE:
Monday came and went, and the live cattle contracts didn't end up doing much of anything throughout the day. Friday's Cattle on Feed report was looked at and soon forgotten about given that its findings were deemed as neutral. The big factors that could affect this week's market and the rest of January are slaughter speeds, boxed beef prices and weather conditions. Packers may have paid $1.00 higher in last week's cash market, but all in all, they championed the week with the biggest victory by being able to back up inventory and only buy a measly 32,534 head in the cash market. February live cattle closed $0.60 lower at $173.77, April live cattle closed $0.47 lower at $176.90 and June live cattle closed $0.05 lower at $174.27. Monday's slaughter is estimated at 115,000 head -- 3,000 head more than a week ago and 7,000 head less than a year ago. New showlists appear to be mixed, higher in Kansas, but lower in Texas and Nebraska/Colorado.
Last week's negotiated cash cattle trade was disappointing as very few cattle traded. But of the few cattle that did trade, Northern dressed cattle sold for $272 to $277, mostly at $274, which is $1.00 higher than the previous week. Southern live cattle sold for mostly $173, $1.00 higher than the week before. Last week's volume of negotiated cash cattle sales totaled 37,348 head. Of which 87% (32,534 head) were committed for nearby delivery, while the remaining 13% were committed to deferred delivery.
Boxed beef prices closed higher: choice up $3.17 ($298.67) and select up $3.53 ($286.58) with a movement of 78 loads (52.93 loads of choice, 7.90 loads of select, zero loads of trim and 17.50 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. Packers were able to back up inventory last week by barely participating in the cash market. Even though boxed beef prices are incentivizing, it's likely that packers will pay close attention to their margins this year as they know that managing supply is the key to safeguarding their profits.
FEEDER CATTLE:
The feeder cattle complex closed mixed as the nearby contracts remained hesitant through today's end while the deferred contracts leaned into the new week and its opportunity. January feeders closed $0.27 lower at $229.82, March feeders closed $0.67 lower at $231.27 and April feeders closed $0.37 lower at $237.10. The corn complex rounded out the day steady which shouldn't scare traders given that corn prices are significantly lower than what they were just even a year ago. Sale barns are expecting large runs of cattle this week as last week's storms delayed a lot of marketing. At Joplin Regional Stockyards in Carthage, Missouri, compared to their last sale two weeks ago and at their midsession point, feeder steers and heifers were trading $10.00 to $17.00 higher. Feeder cattle supply over 600 pounds was 43%. The CME feeder cattle index 1/19/2023: up $1.25, $228.51.
LEAN HOGS:
The lean hog market closed higher in most of its contracts expect in the spot April and May contracts. Traders felt somewhat confident in allowing the contracts to trade mildly higher as pork cutout values are finding support. The only cut that closed lower on the day was the butt which dropped $0.32, but the $4.27 gain in the rib and $4.10 gain in the belly more than offset that mild setback in the butt. Traders are having to monitor resistance levels as the spot April contract continues to respect the resistance around $79.00. Pork cutouts totaled 243.89 loads with 208.13 loads of pork cuts and 35.76 loads of trim. Pork cutout values: up $1.61, $90.17. Monday's slaughter is estimated at 492,000 head. The CME lean hog index 1/18/2023: up $0.19, $68.06.
TUESDAY'S HOG CALL: Steady. It's likely that packers will only vaguely support the cash market on Tuesday as they wait to see how demand fairs through another day and could be more active in their buying towards the middle of the week.
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