GENERAL COMMENTS:
Thursday wasn't a favorable outcome to the livestock markets as most of the complex traded lower and the cash markets continued to trade in their lower manners. Some deferred live cattle contracts were able to sneak through the day's close with moderate support, but the nearby contracts weren't able to shake the market's lower woes. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.50 with a weighted average of $53.98 on 7,185 head. March corn is up 9 3/4 cents per bushel and March soybean meal is up $7.80. The Dow Jones Industrial Average is down 68.95 points and NASDAQ is down 16.31 points.
LIVE CATTLE:
The livestock contracts were pressured to trade lower, but low and behold, before closing, the deferred live cattle contracts were able to scrape by with a moderately higher close. The nearby contracts continue to be faced with a lower trade as the pressure from the week's lighter slaughter and weakening cash cattle market take its toll on the contracts. February live cattle closed $0.17 lower at $112.07, April live cattle closed $0.25 lower at $117.22 and June live cattle closed $0.15 lower at $114.95. There's no shaking the depressed short-term mindset of the contracts, but the market's stronger boxed beef prices are nothing to overlook and by next Friday, the market could sense a little more optimism as the market expects another bullish Cattle on Feed report. Thursday's cash cattle trade was all merely clean-up with cattle trading steady with the week's trends. If there are any cattle to trade Friday, they will most likely trade for the week's set prices. Thursday's slaughter is estimated at 120,000 head, 1,000 head more than a week ago and 3,000 head less than a year ago.
Beef net sales of 16,800 mt reported for 2021, increases were primarily for South Korea (4,900 mt, including decreases of 300 mt), Japan (4,100 mt, including decreases of 300) and China (2,800 mt, including decreases of 200 mt).
Thursday's actual slaughter data shared depressing news for cattlemen as carcass weights are one the rise again. For the week ending Jan. 2, steers averaged 920 pounds (up 7 pounds) and heifers averaged 839 pounds (up 13 pounds from the last report).
Boxed beef prices closed higher: choice up $2.37 ($213.37) and select up $2.01 ($201.07) with a movement of 137 loads (82.49 loads of choice, 19.71 loads of select, 7.48 loads of trim and 26.82 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Seeing that the week's trade has all but been finished, if there are any more cattle to trade come Friday, they will most likely be for steady prices.
FEEDER CATTLE:
While the corn contracts enjoyed another $0.09 to $0.10 rally, the feeder cattle contracts scaled lower throughout Thursday. January feeders closed $0.97 lower at $132.60, March feeders closed $0.95 lower at $133.37 and April feeders closed $0.75 lower at $136.00. The nearby futures for feeder cattle contracts is grim knowing the realities of available pen space and rising feed costs. At Torrington Livestock Auction in Torrington, Wyoming, compared to a week ago, yearling steers and heifers traded unevenly steady, but demand was strong for the calves offered in the day's sale. Steer calves under 650 pounds sold $4.00 to $7.00 higher and steer calves over 650 pounds traded unevenly steady. Heifer calves under 500 pounds traded $3.00 to $8.00 higher but heifer calves over 500 pounds traded unevenly steady when compared to a week ago. This week's sale drew in a lot of buyers as the market had plenty of calves available for feedlots still looking to pens. The CME feeder cattle index for Jan. 13: down $0.66, $135.49.
LEAN HOGS:
The lean hog contracts traded moderately lower throughout Thursday's trade. February lean hogs closed $0.55 lower at $66.30, April lean hogs closed $0.87 lower at $72.07 and June lean hogs closed $0.85 lower at $84.32. At midday, cutout values were lower, but thankfully, even with the pressure mounting in the lean hog contracts, the day's closing cutout value was able to close substantially higher and will hopefully keep packers interested in running swift slaughter paces. Pork cutouts total 288.33 loads with 258.81 loads of pork cuts and 29.51 loads of trim. Pork cutout values: up 2.42, $80.55. Thursday's slaughter is estimated at 497,000 head, steady with a week ago and 1,000 head less than year ago. The CME lean hog index for Jan. 12: up $0.99, $65.48.
Pork net sales of 23,800 mt reported for 2021, increases primarily for Mexico (6,600 mt, including decreases of 700 mt), Japan (3,400 mt, including decreases of 200 mt) and South Korea (3,300 mt, including decreases of 500 mt).
Thursday's actual slaughter data shared the same fate to hog producers as what cattlemen faced, but thankfully not on as dramatic of a scale. For the week ending Jan. 2, live hogs averaged 294 pounds (up 2 pounds) and dressed weights averaged 220 pounds (up 3 pounds from the last report a week ago).
FRIDAY'S CASH HOG CALL: Lower. The weaker cash trend seems to be continuing late into the week and will most likely be the same outcome for Friday's trade.
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