GENERAL COMMENTS:
Tuesday, both the cattle and hog markets saw a slight uptick in slaughter from Monday. The lean hog market continues to trade very cautiously, but the cattle complex rallied upon strong boxes. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.10 with a weighted average of $66.99 on 6,341 head. March corn is up 1 1/4 cents per bushel and March soybean meal is down $3.20. The Dow Jones Industrial Average is up 183.15 points and NASDAQ is up 210.62 points.
LIVE CATTLE:
The live cattle complex grew stronger and stronger as Tuesday traded on. Even though it's only 1,000 head more than Monday, the slight uptick in cattle slaughter is positive. February live cattle closed $1.42 higher at $137.67, April live cattle closed $0.62 higher at $141.20 and June live cattle closed $0.62 higher at $136.85. Packers wanted to capitalize on the market's cautious tone and began to lay bids out for cattle. There were some Southern feedlots that jumped at the early bids, but others and all Northern feedlots are waiting to see what develops later in the week. Southern live cattle traded at $137, which is steady to $1.00 lower than last week. Asking prices range from $138 to $140 in the South and $222-plus in the North. Tuesday's slaughter is estimated at 114,000 head -- 3,000 head less than a week ago and 2,000 head less than a year ago.
Boxed beef prices closed higher: choice up $2.18 ($278.22) and select up $2.13 ($268.63) with a movement of 150 loads (90.99 loads of choice, 19.22 loads of select, 9.96 loads of trim and 30.27 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. Feedlots could very well pull off a week of steady trade given that boxed beef prices are rallying and packers want cattle.
FEEDER CATTLE:
Corn futures rounded out the day will a page full of red ink, which helped the feeder cattle contracts rally alongside the live cattle market. January feeders closed $1.15 higher at $162.07, March feeders closed $1.00 higher at $166.35 and April feeders closed $0.67 higher at $170.12. The market knows that the fundamentals are going to help cow-calf producers' positions and eventually feedlots' positions too. The only hinderance keeping the market from rallying too wildly is the reduction in chain speeds and, long-term speaking, the gamble on whether or not the hills and prairies will get moisture. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week on a run of 16,260 head -- feeder steers traded unevenly steady, but feeder heifers traded $2.00 to $4.00 higher. Steer and heifer calves both traded $3.00 higher. Helping draw more interest to the lighter-weight calves is the fact that the deferred contracts are trading comfortably in the $180 to $182 range. The CME Feeder Cattle Index 1/10/2022: up $0.26, $162.24.
LEAN HOGS:
The lean hog market was able to see a day-over-day rise in pork slaughter (up 10,000 head from Monday), but the market continues to be cautious in its nearby contracts. Wednesday's WASDE report could help the market if consumer demand looks to be generous in the months ahead. If the market can yield a supportive export report Thursday, the market may be able to trade mildly stronger. Packers did, however, end up pushing the cash market more than $1.00 stronger by Tuesday's close, which could mean they believe processing will get back to a normal level here shortly. Upon the announcement that India is once again going to allow imports of U.S. pork into their country, many were expecting the hog market to rally more aggressively Tuesday. But with slaughter a present-day concern, cautious vibes continue. February lean hogs closed $0.52 lower at $77.85, April lean hogs closed $0.50 lower at $84.20 and June lean hogs closed $0.22 lower at $96.27. Pork cutouts totaled 413.52 loads with 389.19 loads of pork cuts and 24.33 loads of trim. Pork cutout values: down $4.80, $81.62. Tuesday's slaughter is estimated at 458,000 head -- 9,000 head less than a week ago and 42,000 head less than a year ago. Monday's hog slaughter was revised to 448,000 head -- which is 9,000 head less than what was originally stated. The CME Lean Hog Index 1/7/2022: up $0.97, $74.70.
WEDNESDAY'S CASH HOG CALL: Steady. Packers were more aggressive in Tuesday's cash market, but still have concerns regarding processing, so it's unlikely the market jumps much higher.
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