GENERAL COMMENTS:
Friday came and went, and though the cattle contracts would have liked to round out the week on a higher note, no one is complaining after the week the market just had. The lean hog complex closed higher in its nearby contracts, but what was even more impressive is the movement that pork cutouts had. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $6.91 with a weighted average of $99.13 on 3,197 head. July corn is down 6 1/4 cents per bushel and July soybean meal is down $11.80. The Dow Jones Industrial Average is down 981.36 points.
From Friday to Friday, livestock futures scored the following changes: April live cattle up $1.78, June live cattle up $2, April feeder cattle down $0.25, May feeder cattle up $2.10, June lean hogs up $0.30, July lean hogs up $0.60.
Friday's Cold Storage report shared that total red meat supplies in freezers were up 1% from the previous month and up 9% from last year. Total pounds of beef in freezers were up 1% from the previous month and up 11% from last year. Frozen pork supplies were up 2% from the previous month and up 8% from last year. Stocks of pork bellies were up 13% from last month and up 60% from last year. Total frozen poultry supplies were up 1% from the previous month but down 1% from a year ago. Total stocks of chicken were down 1% from the previous month but up 5% from last year.
LIVE CATTLE:
It was a tremendous week for the live cattle complex -- the futures market rallied higher and supported the cash market, the June contract rounded out the week above the 100-day moving average, and cash cattle traded anywhere from $1-$4 stronger. This week's rally could be described as the perfect storm for feedlots. Having thin supplies of market-ready cattle, feedlots were able to capitalize on the fact that packers were short-bought heading into the week, which drove prices higher. We know that in the weeks ahead, prices will soften. But it's now a question of when and by how much. If slaughter speeds remain aggressive, then supplies of market-ready cattle won't become problematic until sometime in May. In May, calf-fed fats will be ready, and within a week or two, packers could begin to pull those cattle early to avoid paying higher cash prices. Nevertheless, this week's rally was one that feedlots can feel proud of, and it again shows the power of bidding by small regional packers and the importance of the board and cash market working side by side. April live cattle closed $1.65 lower at $142.45, June live cattle closed $1.47 lower at $138.42, and August live cattle closed $1.20 lower at $140.37.
The week's cash cattle trade developed early, as packers were short-bought and desperately needed cattle. Beginning on Tuesday, Southern live cattle sold for $139 to $141, but mostly at $140, which is $1 stronger than last week. Northern dressed deal ranged from $228 to $236, but mostly at $230, which is $4 higher.
Friday's slaughter is estimated at 119,000 head -- 5,000 head more than a week and year ago. Saturday's slaughter is estimated at 63,000 head -- 41,000 head more than a week ago and 8,000 head less than a year ago. This week's slaughter is estimated at 665,000 head -- 31,000 head more than a week ago and steady with a year ago.
Boxed beef prices closed lower: choice down $2.26 ($267.91) and select down $0.91 ($254.77) with a movement of 95 loads (57.74 loads of choice, 15.46 loads of select, 11.47 loads of trim and 10.39 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Higher. This week's volume was significant in its size, but for packers to meet all their commitments ahead of prime grilling months, they'll need to continue to buy and process cattle.
FEEDER CATTLE:
The feeder cattle contracts coasted through Friday's close, keeping as much of the complex elevated as possible ahead of the weekend. With the live cattle complex rounding out the week softer, the feeder cattle market was on its own ahead of the day's close. Thankfully, with parts of the U.S. getting some much-needed moisture, buyers have been seeking out quality feeders, as it's looking like there could be a hole in the market in September/October 2022. Cost of gains and limited feed continue to be an issue, but that's an issue that cattlemen realize isn't going away anytime soon. April feeders closed $0.50 lower at $157.95, May feeders closed $0.97 lower at $163.87 and August feeders closed $0.45 higher at $176.90. Oklahoma Weekly Cattle Auction Summary shared that compared to last week throughout the state, feeder steers traded steady to $3 higher, and feeder heifers traded $1 to $4 higher. Stocker steers and steer calves traded steady to $3 higher, and stocker heifers and heifer calves sold $2 to $4 higher. The CME feeder cattle index 4/21/2022: up $1.31, $155.21.
LEAN HOGS:
The lean hog complex added some "pizzaz" to the market ahead of Friday's close to keep us all on our toes. First, the nearby contracts closed higher after a tough downward push earlier in the week. Second, pork cutouts pushed a whopping 336.20 loads out the door by Friday afternoon's report, and pork cutout prices closed over $1 higher. When it comes to next week, eyes will be watching the hog market carefully, trying to gauge where things are headed next. The fact remains that market-ready supplies of hogs are thin, and pork packer margins have begun to rebound. Still, consumer demand remains questionable. June lean hogs closed $1.60 higher at $118.77, July lean hogs closed $1.40 higher at $120.02 and August lean hogs closed $1.05 higher at $118.07. Pork cutouts total 336.20 loads with 308.64 loads of pork cuts and 27.56 loads of trim. Pork cutout values: up $1.08, $111.28. The CME lean hog index 4/20/2022: up $0.32, $101.25.
Friday's slaughter is estimated at 463,000 head -- 28,000 head more than a week ago and 12,000 head less than a year ago. Saturday's kill is projected to be around 114,000 head -- 106,000 head more than a week ago and 53,000 head more than a year ago.
MONDAY'S CASH HOG CALL: Higher. Given that prices were down over $6 in Friday's cash hog market, I suspect that prices will be more favorable come Monday, but that significant trade volumes will wait until later in the week to develop.
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