Thursday Midday Livestock Market Summary - Cattle Bought With Time

GENERAL COMMENTS:

The cash cattle market did indeed see higher prices like we suspected, but unfortunately most of the dressed cattle that saw those higher prices were also bought with time. The lean hog market has begun to show some signs that it's growing tired and is trading mostly lower into Thursday afternoon. March corn is up 2 1/2 cents per bushel and March soybean meal is down $1.80. The Dow Jones Industrial Average is down 80.50 points and NASDAQ is down 41.63 points.

LIVE CATTLE:

Live cattle futures are rallying into Thursday afternoon and the cash cattle market was able to pull off some higher trade. But in order to get those higher cash prices, feedlots had to sell cattle with time. We knew packers were starting to feel the heat from feedlots as everyone and their dog knows supplies of market-ready cattle are thin. Upon evaluating the marketplace and looking at their needs for the weeks ahead, packers knew if they didn't get some cattle bought with time they were going to get caught chasing the cash cattle market at the mercy of whatever feedlots' desired for prices. They can minimize the momentum of cash cattle market gains by buying cattle with time, and that's exactly what they did this morning. There was a light round of trade reported in Nebraska at $224 to $226 which is $2.00 to $4.00 higher than last week's weighted average. The high end of the offering was by a regional packer and, unfortunately, most of the cattle were bought for delivery the week of Feb. 21. February live cattle are up $0.02 at $142.92, April live cattle are up $0.05 at $147.87 and June live cattle are up $0.15 at $142.62.

Beef net sales of 19,500 metric tons (mt) for 2022 were down 3% from the previous week and 63% from the prior four-week average. The three primary buyers were Japan (8,600 mt), South Korea (7,300 mt) and Canada (1,000 mt).

Boxed beef prices are lower: choice down $0.68 ($275.11) and select down $2.31 ($269.74) with a movement of 97 loads (68.45 loads of choice, 10.85 loads of select, 8.62 loads of trim and 9.18 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures continue to fixate their attention to the opportunity that lies in the months ahead and are ignoring the fact that the corn and soybean markets are continuing to rally. March feeders are up $0.47 at $168.75, April feeders are up $1.12 at $173.70 and May feeders are up $0.85 at $177.57. Even though sales are light right now, buyers have still been aggressive this past week and with the price forecast for the latter half of 2022 only growing stronger, it's likely this type of market interest continues to be the theme of the cattle complex.

LEAN HOGS:

The lean hog contracts were running at Thursday with all they had, but upon absorbing the weaker export report, traders finally started to run out gas in this week's robust rally. April lean hogs are down $0.52 at $104.25, June lean hogs are down $0.65 at $108.30 and July lean hogs are down $0.20 at $112.97. It's likely the futures will close lower given the market has run into some resistance. But seeing how pork cutout values fare and how the cash market closes will be insightful.

Pork net sales of 18,100 mt were down 40% from the previous week and 71% from the prior 4-week average. The primary buyers were Mexico (10,500 mt), Japan (2,000 mt) and Canada (1,400 mt).

The projected CME Lean Hog Index for 2/9/2022 is up $0.52 at $87.74, and the actual index for 2/8/2022 is up $0.60 at $87.22. Hog prices are higher on the National Direct Morning Hog Report, up $5.44 with a weighted average of $80.81, ranging from $73.00 to $90.00 on 2,940 head and a five-day rolling average of $76.09. Pork cutouts total 123.80 loads with 101.48 loads of pork cuts and 22.32 loads of trim. Pork cutout values: down $3.11, $101.73.