GENERAL COMMENTS:
It was a mixed day for the livestock complex as both the live cattle and feeder cattle contracts closed mixed, but were thankful to see a supportive WASDE report for cattle and were relieved to see USDA didn't decrease their corn projection. Meanwhile the lean hog complex closed mostly higher after coming off the market's recent highs earlier this week. Hog prices closed lower on the Daily Direct Afternoon Hog Report down $2.57 with a weighted average of $97.73 on 4,194 head. May corn is up 11 cents per bushel and May soybean meal is up $8.00. The Dow Jones Industrial Average is up 137.55 points and NASDAQ is down 186.30 points.
From Friday-to-Friday livestock futures scored the following changes: April live cattle down $0.82, June live cattle down $2.03; April feeder cattle down $5.02, May feeder cattle down $6.75; April lean hogs down $2.27, June lean hogs down $5.88.
LIVE CATTLE:
The live cattle complex kicked the can down the road as traders opted to let Monday's trade deal with the market and simply let the contracts drift lower ahead of Friday's close. April live cattle closed $0.17 lower at $137.82, June live cattle closed $0.27 lower at $133.82 and August live cattle closed $0.25 lower at $135.85. The cash market saw a handful of cattle trade Friday afternoon, but all prices were steady with the week's trend. Southern live cattle throughout the week traded mostly at $138 (steady) and Northern dressed cattle traded at mostly $222 (steady). Packers have been meticulous about managing their inventories and keeping themselves from having to support the cash cattle market. Sometime in May calf-fed fats will become available and packers will be able to breathe again as they'll fully control the show and be able to pressure the cash market lower as supplies will likely overwhelm the market. With how mild winter was this year, cattlemen are in desperate need of moisture and next week a big snow storm is expected to carry snow and strong winds across the Northwest U.S. to the Great Lakes, which could make hauling and marketing cattle a challenge.
Friday's slaughter is estimated at 120,000 head -- 11,000 head more than a week ago and 8,000 head more than year ago. Saturday's slaughter is projected to be around 61,000 head -- 21,000 head more than a week ago and 3,000 head less than year ago.
In Friday's WASDE report, beef production grew by 140 million pounds from last month's report as higher placements bolster vigorous processing speeds. In addition, the market continues to see more non-fed cattle slaughter than years past due to drought conditions. Quarterly prices saw minute changes from last month's report as the first quarter fell by $0.75 to average $139.25, the second quarter held steady at $139.00, the third quarter remained steady at $136.00 but the fourth quarter grew $1.00 stronger to average $143.00. Once again, beef imports grew by 20 million pounds and exports held steady at 3,300,000 million pounds.
Boxed beef prices closed lower: choice down $0.93 ($270.47) and select down $0.89 ($260.33) with a movement of 92 loads (54.90 loads of choice, 13.87 loads of select, 12.23 loads of trim and 11.43 loads of ground beef). Throughout the week choice cuts averaged $270.50 (up $4.31 from last week) and select cuts averaged $261.44 (up $2.74 from last week) with a total movement of cuts grinds and trim totaling 514 loads.
MONDAY'S CASH CATTLE CALL: Steady. Given that packers have cattle committed with time, it's unlikely they'll have to support the cash market to the point where prices grow firmer.
FEEDER CATTLE:
The feeder cattle contracts rounded out Friday's trade mixed as the futures desperately long for support as the market dealt with a grim outlook this past week. April feeders closed $0.15 higher at $156.55, May feeders closed $0.10 lower at $159.37 and August feeders closed $0.72 lower at $173.55. Friday's WASDE report showed a neutral outlook for the corn sector as USDA kept its estimate of U.S. ending corn stocks steady at 1.440 billion bushels (bb) for 2021-2022. The feeder cattle market was relieved to see USDA didn't back down its corn figure, but while the war in Ukraine continues to carry on, farmers are willing and anxious to export corn, which doesn't bode well for feedlots who are desperate for a break in feed prices. Oklahoma's Weekly Cattle Auction Summary shared that throughout the entire state compared to last week feeder steers sold $1.00 to $2.00 lower and feeder heifers traded $2.00 to $3.00 lower. Stocker cattle and calves traded $3.00 to $6.00 lower. The CME Feeder Cattle Index 4/7/2022: up $0.42, $156.01.
LEAN HOGS:
Traders weren't willing to do much of anything with the lean hog complex ahead of the weekend and largely the contracts closed just above steady before Friday's last bell. April lean hogs closed $0.02 lower at $99.02, June lean hogs closed $0.42 higher at $114.57 and July lean hogs closed $0.62 higher at $115.90. The lean hog complex wasn't surprised by the findings in today's WASDE report, but it did bring the market some comfort to see quarterly price projections higher for the second, third and fourth quarters of 2022 amid tight supplies and excellent demand. Pork cutouts total 270.77 loads with 245.79 loads of pork cuts and 24.98 loads of trim. Pork cutout values: up $0.05, $103.16. The CME Lean Hog Index 4/6/2022: down $0.40, $100.68.
Friday's WASDE report shared that pork production fell by 240 million pounds from last month's report as tight packer margins slow processing speeds and the latest Quarterly Hogs and Pigs report shared that producers intended to reduce farrowings in March through May. Quarterly prices grew from March's WASDE report as demand continues to remain excellent. First quarter prices were the only quarter to fall from a month ago as they dropped $0.45 to average $65.55, but the second quarter gained $2.00 to average $80.00, the third quarter gained $2.00 to average $77.00 and the fourth quarter jumped $4.00 to average $69.00. Imports grew by 15 million pounds and exports fell by 135 million pounds as U.S. hog prices are higher than other countries.
Friday's slaughter is estimated at 460,000 head -- 1,000 head more than a week ago and 10,000 head less than a year ago. Saturday's slaughter is projected to be around 96,000 head -- 35,000 head more than a week ago and 89,000 head less than a year ago. And as a side note, Thursday's hog slaughter was revised to 466,000 head.
MONDAY'S CASH HOG CALL: Steady. Packers may be able to get some more product moved ahead of the Easter holiday but, by and large, it's likely most retailers have already done their buying. It's likely packers will be aggressive in the cash market a day or two next week, but with their margins somewhat under pressure, they won't carelessly chase hogs for the fun of it.
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