GENERAL COMMENTS:
The livestock complex traded sheepishly Monday as the complex isn't comfortable with the world's uncertainty. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.62 with a weighted average of $89.40 on 4,163 head. May corn is up 35 cents per bushel and May soybean meal is up $3.60. The Dow Jones Industrial Average is down 166.15 points and NASDAQ is up 56.78 points.
LIVE CATTLE:
Live cattle futures kept their downward path as the market traded uneasily with the pressures of global uncertainty looming. This comes as a big frustration to feedlots because the market's weaker tone could minimize the cash cattle rally this spring. With showlists lower, carcass weights mostly steady with those of a year ago and consumer demand still strong -- feedlots see this as the perfect storm to push prices higher. But they'll need the support of the live cattle contracts if it's going to be a significant rally. February's contract expires today and so the market's official spot contract is now on the beloved April contract. April live cattle closed $0.50 lower at $141.42, June live cattle closed $0.60 lower at $137.70 and August live cattle closed $0.27 lower at $137.15. The cash cattle market didn't see any interest and it's likely packers are going to be tough to deal with as they have some cattle already committed for this week. Feedlots will have to work closely with one another if they're going to get more money than a week ago.
Monday's slaughter is estimated at 122,000 head -- 14,000 head more than a week ago and 4,000 head more than year ago.
Last week's negotiated cash cattle trade totaled 68,349 head. Of that 66% (45,392 head) were committed for nearby delivery, while the remaining 34% (22,957 head) were committed for deferred delivery.
Boxed beef prices closed lower: choice down $0.76 ($257.51) and select down $2.00 ($253.41) with a movement of 85 loads (50.43 loads of choice, 17.91 loads of select, 3.13 loads of trim and 13.78 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady to $1.00 higher. Packers are going to be tough to crack this week as they already have some cattle committed for this time. That being said, seeing higher trade isn't completely out of the question. The bigger question is: Will feedlots be able to limit the cattle packers buy with time this week? Or will packers continue to build their arsenal and slowly cut the legs out from underneath the cash market a week at a time?
FEEDER CATTLE:
The feeder cattle complex closed lower as the grain market posted a significant rally. With Ukrainians fighting for their lives and trying to keep Russia from gaining any more power over their people, the grain markets have turned heated as Ukraine is a major player in the grain world. Feeder cattle contracts were able to close with softer losses than what were faced earlier in the day. March feeders closed $2.30 lower at $157.72, April feeders closed $2.75 at $162.00 and May feeders closed $2.80 lower at $167.80. At Joplin Regional Stockyards in Carthage, Missouri, compared to last week on a run of 4,777 head feeder steers under 500 pounds traded $3.00 to $5.00 higher. Heavier weights traded steady. Feeder heifers traded $1.00 to $3.00 higher. It's likely that market continues to see the trend of feeder cattle trading mixed as buyers don't want to pick up more cattle for the summer months when there's more opportunity in the deferred months. The CME Feeder Cattle Index 2/25/2022: down $0.67, $159.91.
LEAN HOGS:
The nearby lean hog contracts struggled through Monday's trade, but the late 2022 and early 2023 contracts rallied through the day's close. The lean hog complex has fared far better than the cattle contracts have with the onset of geopolitical tensions. The fact remains that supplies of market-ready hogs continue to be thin and consumers are aggressively seeking pork as it's an affordable option compared to the other meats. Pork cutout values could stall out as Lent begins this Wednesday. But if the futures market is to keep rallying, it will need to see some support from cutout values. April lean hogs closed $0.17 lower at $103.50, June lean hogs closed $0.45 lower at $113.42 and July lean hogs closed $0.57 lower at $112.97. Pork cutouts totaled 274.24 loads with 248.13 loads of pork cuts and 26.11 loads of trim. Pork cutout values: down $1.05, $112.27. Monday's slaughter is estimated at 470,000 head -- 8,000 head less than a week ago and 5,000 head less than a year ago. Friday's hog slaughter was revised to 471,000 head and Saturday's slaughter was revised to 126,000 head. The CME Lean Hog Index 2/24/2022: up $0.36, $98.40.
TUESDAY'S CASH HOG CALL: Steady to somewhat higher. Monday's cash hog market wasn't very lively, I'd expect trade to see more interest come Tuesday or Wednesday.
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