GENERAL COMMENTS:
Thursday's export report was noteworthy for both cattle and hogs, although it didn't help either of their markets trade higher. Meanwhile, the feeder cattle contracts are continuing to drift lower as the market stomachs another rally in the corn complex. May corn is up 25 1/4 cents per bushel and May soybean meal is up $12.10. The Dow Jones Industrial Average is down 299.73 points and NASDAQ is down 220.10 points.
LIVE CATTLE:
The live cattle complex opened up a thrilling export report early Thursday morning, but the market hasn't seen much more excitement since then. April live cattle are down $0.85 at $136.72, June live cattle are down $0.80 at $133.15 and August live cattle are down $0.52 at $135.10. While boxed beef prices may be extremely close to bottoming (as midday prices are higher for both choice and select) and the market warmly welcomed any export interest, the pressures of war and a lousy cash cattle market keep the market's bull spreaders at bay. The country has yet to see any renewed interest in the cash market, but packers got their way with this week's market again, unfortunately. Northern cattle have been selling for mostly $220, which is $4.00 cheaper than last week, and Southern live cattle have been selling for $138, which is $2.00 cheaper than a week ago. Nevertheless, until the market can get past the focus of war, downward pressure is likely to remain.
Beef net export sales of 27,500 metric tons (mt) for 2022 -- a marketing year high -- were up 16% from the previous week and 36% from the prior four-week average. The three largest buyers were China (10,400 mt), Japan (6,400 mt) and South Korea (3,700 mt).
Boxed beef prices are higher: choice up $1.32 ($254.02) and select up $2.42 ($247.21) with a choice/select spread of $6.81 and a movement of 69 loads (29.51 loads of choice, 8.03 loads of select, 3.99 loads of trim and 27.00 loads of ground beef).
FEEDER CATTLE:
Corn jumps higher and feeder cattle stoop lower. The cat and mouse game between grain prices and the feeder cattle complex is intense as the feeder cattle contracts are receiving no support from the live cattle sector. Not only is the feeder cattle market seeing its futures complex driven lower by input cost concerns, but throughout the countryside buyers are extremely leery of buying any feeders/calves as the market is too volatile to gamble with any risk. March feeders are down $1.80 at $152.25, April feeders are down $3.00 at $157.15 and May feeders are down $3.45 at $162.47.
LEAN HOGS:
The lean hog complex is trending lower in its spot April contract, but the rest of the lean hog complex is trending mildly higher. April lean hogs are down $1.00 at $100.15, June lean hogs are up $0.37 at $114.30 and July lean hogs are up $0.50 at $113.55. While the complex wasn't showered in a robust export report, it was interesting to see China as a buyer again this week. With feed prices rising in China, their ability to continue to grow their domestic herd is being challenged by rising input costs. Sound familiar? Both cash prices and pork cutout values are lower at midday as packers were aggressive in the cash market earlier in the week and the pork cutout values have seemed to somewhat stalled out for the time being.
Pork net export sales of 25,400 mt for 2022 were down 40% from the previous week and 4% from the prior 4-week average. The three largest buyers were Mexico (12,800 mt), China (3,600 mt) and South Korea (2,100 mt).
The projected CME Lean Hog Index for 3/9/2022 is up $0.65 at $99.91 and the actual index for 3/8/2022 is up $0.26 at $99.26. Hog prices are lower on the Daily Direct Morning Hog Report, down $0.42 with a weighted average of $101.56, ranging from $96.00 to $112.00 on 4,298 head and a five-day rolling average of $98.50. Pork cutouts total 152.50 loads with 136.27 loads of pork cuts and 16.23 loads of trim. Pork cutout values: down $0.97, $106.77.
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