GENERAL COMMENTS:
Monday ended up treating the livestock contracts far better than anticipated as the contracts were able to close mostly higher. The snowstorm that is moving across the nation's feeding regions could push this week's cash cattle trade into waiting until later in the week, which would help feedlots entice packers into pay more. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.16 with a weighted average of $55.30 on 6,373 head. March corn is up 11 cents per bushel and March soybean meal is up $8.00. The Dow Jones Industrial Average is down 36.98 points and NASDAQ is up 92.93 points.
LIVE CATTLE:
With a large portion of feeding country getting blasted by Monday's snowstorm, opportunity continues to linger in the live cattle market. The live cattle contracts had a successful day continuing to add to their position and closing higher once again. February live cattle closed $0.20 lower at $116.52, April live cattle closed $0.42 higher at $112.95 and June live cattle closed $0.02 higher at $118.82. With both the board and boxed beef prices trudge higher, the market's now looking to the cash cattle market and yearning for it to make its mark at higher prices. It's unlikely that trade will be aggressive early this week with the snow passing through, but after the midweek point trade is expected to be at least $2.00 higher this week. Monday's cash cattle trade was at a near standstill with bids yet to develop and asking priced still unknown. Monday's slaughter is estimated at 118,000 head, 6,000 head more than a week ago and 4,000 head less than a year ago.
Monday's cold storage report did share some alarming news for the beef sector. Total pounds of beef in freezers were up 4% from the previous month and up 11% from last year. This amounts to be the most frozen beef the industry has seen in the last three years.
Boxed beef prices closed higher: choice up $3.91 ($226.73) and select up $2.87 ($216.21) with a movement of 91 loads (54.06 loads of choice, 17.57 loads of select, 7.68 loads of trim and 12.06 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Higher. It's unlikely that trade will develop as early as Tuesday, but once the market does decide to trade cattle, feedlots have a grand opportunity to move the cash market at least $2.00 higher this week.
FEEDER CATTLE:
The corn market took a slight run at regaining some of what the market lost late last week but for the most part the feeder cattle contracts traded relentlessly, keeping their profits secured through closing. March feeders closed $0.30 lower at $143.85, April feeders closed $0.12 higher at $146.25 and May feeders closed $0.62 higher at $147.65. The biggest gains were seen in the deferred contracts (August 2021 through November 2021), which closed anywhere from $1.12 to $1.87 stronger. At midsession at Joplin Regional Stockyards, in Carthage, Missouri, compared to a week ago, steers under 600 pounds sold steady while steers over 600 pounds sold $2.00 higher. Heifers were trade mostly steady with last week's prices. Meanwhile at West Point Livestock Auction in West Point, Nebraska, the auction hosted a special preconditioned sale and both steers and heifers sold phenomenally. Compared to last week, steers weighing 500 to 600 pounds sold mostly $6.00 to $9.00 higher and 700-pound steers sold steady to $2.00 higher. Heifers weighing 500 to 600 pounds sold $5.00 to $8.00 higher. The snow moving across Kansas and Nebraska may hinder some of the feeder cattle sales early this week as large amounts of snow are accumulating in those regions. The CME feeder cattle index for Jan. 22: up $0.49, $134.48.
LEAN HOGS:
The lean hog contracts had another impressive day, but were left unsupported from the cash and pork cutout sector. February lean hogs closed $0.70 higher at $70.62, April lean hogs closed $0.47 higher at $76.62 and June lean hogs closed $0.70 higher at $87.50. Monday's Cold Storage report shared that again frozen pork supplies remain critically low as frozen pork supplies were down 3% from the previous month and down 30% from last year, which remain the lowest that the market's seen in the last ten years. Pork cutouts total 307.79 loads with 279.85 loads of pork cuts and 27.93 loads of trim. Pork cutout values: down $0.70, $82.13. Monday's slaughter is estimated at 486,000 head, 59,000 head more than a week ago and 13,000 head less than a year ago. The CME lean hog index for Jan. 21: up $0.15, $65.55.
TUESDAY'S CASH HOG CALL: Steady to somewhat higher. Monday's cash hog trade may have been somewhat lower, but it wouldn't be surprising to see packers steps into the market again at some point this week and buy up a hogs to secure inventory.
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