GENERAL COMMENTS:
It's a rallying day for the feeder cattle complex as the grain markets are not showing any signs of rallying Wednesday, but the live cattle contracts are trending lower as the cash cattle market goes to war with packers. The lean hog complex is rallying in its nearby contracts as the market continues to see support from hungry consumers, which is giving the futures market just enough support to break out of its sideways trade. May corn is down 24 1/2 cents per bushel and May soybean meal is down $1.40. The Dow Jones Industrial Average is up 398.41 points and NASDAQ is up 336.61 points.
LIVE CATTLE:
Grab your popcorn because the cash cattle market is putting on a good show. Asking prices in the South are noted at $142 and in the North at $224. Thus far, packers have yet to offer anything close to those prices. Bids of $138 are offered in Kansas and $140 live in Nebraska and $222 dressed in Nebraska. Throughout both Monday and Tuesday, the futures market was extremely supportive and rallied off Friday's support. But as the cash cattle market goes to war, the futures contracts are holding their breath at lower ranges. If feedlots do indeed get cattle traded at their asking prices, the futures market will likely regain confidence. With all the grain contracts trending lower, this downward pressure is largely stemming from just the cash cattle market's uncertainty.
The Fed Cattle Exchange Auction listed a total of 1,352 head (Texas 838 head, Iowa 230 head, Kansas 150 head, California 134 head), of which none sold, as all 1,352 head were listed as unsold, as they did not meet the reserve prices, which ranged from $140 to $142. Opening prices were at $138; high bids ranged from $138 to $140.
Boxed beef prices are mixed: choice up $0.60 ($258.50) and select down $0.68 ($248.16) with a movement of 61 loads (40.34 loads of choice, 7.69 loads of select, 3.48 loads of trim and 9.67 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures are jumping to higher thresholds as the wheat, soybean and corn markets all trend lower. The market would ideally like to see strong trade continuing in the live cattle sector, but as that market goes to war over cash cattle prices it's teetering on which way to turn. March feeders are up $1.27 at $157.62, April feeders are up $1.57 at $164.17 and May feeders are up $1.37 at $168.67. Wednesday comes as the fourth consecutive day of higher trade now for the feeder cattle complex, which should help potential buyers of calves and feeders feel more confident about stepping back into the market.
LEAN HOGS:
Once again, the nearby contracts in the lean hog complex are stepping out and into higher price points while the deferred contracts drift mildly lower. Helping traders feel more confident about sending the contracts higher is the fact that pork cutouts are being met with adequate enough demand to send prices higher. April lean hogs are up $0.15 at $102.55, June lean hogs are up $0.70 at $120.70 and July lean hogs are up $0.62 at $119.77. With Monday's slaughter revised lower, it will be interesting to see Wednesday's slaughter and if Tuesday's estimate of 479,000 head holds true. Packers are in a balancing act of pushing hogs through the plant in order to serve consumers and capture these price, all while not pushing too aggressively which would drive cash prices higher and over supply the consumer side of the market.
The projected CME Lean Hog Index for 3/15/2022 is down $0.06 at $100.41, and the actual index for 3/14/2022 is down $0.36 at $100.47. Hog prices average $102.27 on the Daily Direct Hog Report, ranging from $98.00 to $112.00 on 3,705 head with a five-day rolling average of $100.95. Pork cutouts total 163.90 loads with 141.17 loads of pork cuts and 22.73 loads of trim. Pork cutout values: up $4.05, $108.53.
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