GENERAL COMMENTS:
There's no better way to ring in the New Year than with a rallying cash cattle market. The cash cattle market has jumped $3.00 to $5.00 higher in the North. The South has yet to trade cattle as feedlots won't take steady bids. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.52 with a weighted average of $61.25 on 6,531 head. March corn is up 3/4 cent per bushel and March soybean meal is down $0.90. The Dow Jones Industrial Average is up 90.42 points and NASDAQ is down 15.50 points.
LIVE CATTLE:
If you've ever questioned how powerful a united front can be, look no further than the current cash cattle market and you'll understand how strong many voices, beckoning for the same thing, can be. The cash cattle market has sparked a rally in both live and feeder cattle futures and still Southern feedlots are holding out for more. With showlists favoring their position, boxed beef prices scaling higher and nearly all feedlots who sell in the cash market unwilling to take steady to $1.00 higher -- feedlots are demanding more money and more leverage. An old feeder once told me, "You're either on the menu or you're at the table; but I promise you, you aren't both." That's the perfect description for this week's market. Feedlots are pulling up a chair to the table and demanding more while the market is in their favor. February live cattle closed $1.32 higher at $140.72, April live cattle closed $1.37 higher at $145.32 and June live cattle closed $1.20 higher at $139.52. New contract highs were made throughout a number of the live cattle contracts Wednesday and with $145 representing the current April 2022 contract -- it's likely sale barns are lively next week as order buyers are anxious to get in the game. There's been some cash cattle trade in the North at $218 to $226, mostly $220 to $222, which is $3.00 to $5.00 higher than a week ago. And in the South -- the standoff between packers and feedlots is as intense as ever. Asking prices for cattle in the North are $224-plus and in the South $140-plus. The market should see more cash cattle trade develop before the week's end, but at this rate packers are going to have to up their ante because feedlots aren't willing to cave as they know packers need cattle for January.
Wednesday's slaughter is estimated at 120,000 head -- 1,000 head less than a week ago and 2,000 head more than a year ago.
Boxed beef prices closed higher: choice up $1.05 ($265.71) and select up $1.00 ($257.09) with a movement of 135 loads (82.81 loads of choice, 22.07 loads of select, 14.18 loads of trim and 15.44 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady with the week's trend to $2.00 higher. The market should see more cash cattle trade develop before the week's end, but at this rate packers are going to have to up their ante because feedlots aren't willing to cave as they know packers need cattle for January.
FEEDER CATTLE:
The feeder cattle complex has had to reply heavily on the live cattle market over the last two weeks given that sale barns are closed over the two holidays. The feeder cattle contracts were nearly given a free pass to trade higher throughout Wednesday's trade as the corn market didn't add any pressure as it traded mostly sideways and the cash cattle market shot higher, which pushed both feeder and live cattle futures higher. January feeders closed $2.32 higher at $165.87, March feeders closed $2.82 higher at $168.05 and April feeders closed $2.52 higher at $171.05. Corn can obviously pose a threat at any time to the success and rallying ability of the feeder cattle market, but cow-calf producers who held onto some calves to market in January are getting excited about what the market may have to offer. The CME Feeder Cattle Index 12/28/2021: down $0.07, $159.45.
LEAN HOGS:
Thankfully ,the lean hog complex jumped mostly higher before closing Wednesday afternoon, despite weaker cash and cutout prices. February lean hogs closed $1.20 higher at $83.82, April lean hogs closed $0.90 higher at $88.45 and June lean hogs closed $0.42 higher at $99.05. With the Jan. 1, New Year celebration close enough to touch, there will be a lot of change the hog market will endure during the dawning of the New Year with Proposition 12. It's hard to say what all the effects of the law will be, but we can undoubtedly expect hog prices in California will go up. But from there, the questions get numerous and the answers are unknown. With higher-priced pork in California, how much will their demand waiver? For the pork that can no longer go to California, what markets will it try to tap into? And how will that negatively affect prices? There's a lot to be monitoring on the hog side of things come 2022.
Pork cutouts totaled 236.44 loads with 214.38 loads of pork cuts and 22.06 loads of trim. Pork cutout values: down $2.60, $84.29. Wednesday's slaughter is estimated at 479,000 head -- 15,0000 head more than a week ago and 13,000 head more than a year ago. The CME Lean Hog Index 12/27/2021: up $0.66, $71.82.
THURSDAY'S CASH HOG CALL: Steady to somewhat weaker. Given that packers were extremely aggressive in the cash market earlier in the week, their need to dive into the market ahead of a long holiday weekend is thin.
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