GENERAL COMMENTS:
The lean hog complex continues to jump to new highs as the market rallies on expected demand and thin supplies of market-ready hogs. Meanwhile, the feeder cattle complex took Tuesday for all that it was worth as the corn market's regression posed an opportunity for feeders to rally. Hog prices closed higher on the National Direct Afternoon Hog Report, up $7.99 with a weighted average of $82.51 on 6,045 head. March corn is down 3 cents per bushel and March soybean meal is up $1.30. The Dow Jones Industrial Average is up 371.65 points and NASDAQ is up 178.79 points.
LIVE CATTLE:
Live cattle futures closed mixed as the grain contracts traded lower. But still the market is looking to its fundamental side for continued support. April live cattle closed $0.22 lower at $146.17, June live cattle closed $0.15 higher at $141.25 and August live cattle closed $0.32 higher at $140.12. Thankfully throughput continues to be aggressive, which bodes well for feedlots. Packers have some cattle committed with time, but if they are going to keep running chain speeds this rapidly they'll need to jump into the cash market. The cash cattle market's ability to rally long-term will be if packers buy a plethora of cattle for the deferred delivery or not. If they do, the cash cattle market will be cut short of its full opportunity. A handful of cattle traded Tuesday, but largely the complex has yet to see where prices will fall this week. Asking prices in the South are marked at $142 to $143 and the North has yet to disclose what they'd like for prices.
Tuesday's slaughter is estimated at 122,000 head -- 1,000 head more than a week ago and 6,000 head more than a year ago. Trade isn't expected to do much until Wednesday afternoon, or potentially even later.
Boxed beef prices closed lower: choice down $1.50 ($277.46) and select down $1.20 ($273.84) with a movement of 180 loads (119.20 loads of choice, 19.43 loads of select, 4.48 loads of select, 36.39 loads of trim).
WEDNESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. With processing speeds cranking as fast as they are, packers will likely have to support the market.
FEEDER CATTLE:
The feeder cattle complex closed fully higher with the strongest advancements made in the market's nearby contracts. Upon seeing both corn and soybean lower, the feeder cattle contracts shot higher as the market lent it an opportunity. March feeders closed $1.85 higher at $166.87, April feeders closed $1.50 higher at $171.77 and May feeders closed $1.17 higher at $175.90. As the market approaches resistance, the complex desperately hopes the cash cattle market can pull off another week of higher trade as that will likely fuel the contracts to keep trading higher. At OKC West in El Reno, Oklahoma, compared to last week at their midsession point, steer and heifer calves sold $6.00 to $8.00 higher, and demand was strong throughout the sale. Sale receipts continue to be light as most producers have already marketed the cattle they didn't intend to carry over into spring. The CME Feeder Cattle Index 2/7/2022: up $1.29, $161.43.
LEAN HOGS:
Lean hog futures continue to rally to new highs and the full head of steam doesn't seem to be weakening. April lean hogs up $2.52 up $103.80, June lean hogs up $2.37 up $112.75 and July lean hogs up $1.77 at $111.47. Wednesday's WASDE report could be even more invigorating for the market as we will see how pork production forecasts have changed, as well as export opportunities. Pork cutouts total 347.75 loads with 307.97 loads of pork cuts and 39.77 loads of trim. Pork cutout values: down $0.90, $97.29. Tuesday's slaughter is estimated at 472,000 head -- 8,000 head less than a week ago and 18,000 head less than a year ago. The CME Lean Hog Index 2/4/2022: up $1.57, $85.87.
WEDNESDAY'S CASH HOG CALL: Steady. Given the back-and-forth nature the cash hog market has had, it could stabilize in the later part of the week after two big days of drastic changes.
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