GENERAL COMMENTS
The livestock complex didn't see much support throughout Friday's market as traders longed for the three-day weekend ahead of them. The cash cattle market did see some more trade, for mostly steady prices with the week's trend. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.32 with a weighted average of $74.98 on 4,702 head. March corn is down 1 cent per bushel and March soybean meal is up $12.50. The Dow Jones Industrial Average is down 73.55 points.
Friday to Friday, livestock futures scored the following changes: December live cattle down $2.07, February live cattle up $0.15; January feeders cattle down $0.30, March feeder cattle down $0.53; February lean hogs down $0.13, April lean hogs down $0.08; March corn up $0.12, May corn up $0.13.
LIVE CATTLE:
The live cattle complex closed in the same damper fashion that the rest of the livestock contracts faced, but that shouldn't belittle the wild success that the market accomplished throughout this holiday-shortened week. From exceptionally higher boxed beef prices to the fact that Northern feedlots were able to advance their market $3.00 to $5.00 higher -- the live cattle complex rounded out 2022 with a bang! It will be interesting to see what packers do in the first few weeks of 2023 and what pace they run processing speeds at. These strong box prices will incentivize them to run fast chain speeds, but they'll do so cautiously as that also means that they'll have to procure cattle out of the cash sector. February live cattle closed $0.95 lower at $157.90, April live cattle closed $0.65 lower at $161.80 and June live cattle closed $0.32 lower at $157.82. There was another light movement of cattle traded throughout Friday's market with Southern live cattle trading for $157 which is steady with Thursday's business, but Northern dressed cattle sold for $252 which is steady too somewhat lower than Thursday's trade. Throughout the week most Northern deals were marked from $248 to $255, but mostly at $252 to $254, which is $3.00 to $5.00 higher than last week's weighted average. Most Southern cash cattle trade sold for $157, which is $1.00 stronger than last week's weighted average.
Friday's slaughter is estimated at 122,000 head, 18,000 head more than a week ago and incomparable to a year ago. Saturday's slaughter is projected to be around 37,000 head. This week's slaughter is estimated at 547,000 head -- that's 15,000 head less than a week ago and 23,000 head more than a week ago.
Beef net sales of 2,300 mt were reported for Japan (1,800 mt), South Korea (1,700 mt) and Mexico (200 mt).
Boxed beef prices closed higher: choice up $3.12 ($281.98) and select up $0.23 ($250.93) with a movement of 66 loads (46.78 loads of choice, 7.20 loads of select, 2.80 loads of trim and 9.58 loads of ground beef). The choice/select spread sits at $31.05. Throughout the week choice cuts averaged $280.07 (up $13.89 from last week) and select cuts averaged $248.64 (up $9.43 from last week) with a total movement of 347 loads of cuts, grinds and trim. Throughout the week the choice/select spread averaged $31.43.
TUESDAY'S CATTLE CALL: Higher. With boxed beef prices as high as they are, packers will want to sell as much product as possible, which pushes them to support the cash cattle market.
FEEDER CATTLE:
The feeder cattle complex closed lower ahead of Friday's last call, but that was a common trend for the day throughout the cattle complex. Traders had seen ample fundamental support throughout the week to keep the market trading higher if they so desired (strong boxed beef prices, higher cash cattle trade, and Friday's corn market closed lower too), but with the three-day weekend lingering before them, traders grew less and less worried about participating in the market ahead of the week's end and ultimately let the feeder cattle contracts drift lower to round out the week. It will be extremely interesting to see how feeder cattle sell next week throughout the countryside as most sale barns haven't had a sale over the last two weeks, and since their last sale, the market has gained an even more substantial foothold in its strong fundamental position. So long as the corn market doesn't soar higher, feeders could be met with fiery demand next week. January feeders closed $0.10 lower at $183.70, March feeders closed $0.55 lower at $186.22 and April feeders closed $0.52 lower at $189.62. The CME Feeder Cattle Index for Dec. 29: up $2.09, $181.93.
LEAN HOGS:
By Friday's close, the lean hog complex saw a slightly lower demise in its nearby contracts while the deferred months were able to keep their position mildly elevated. The biggest hinderance to the lean hog market right now is the sheer fact that traders aren't seeing the fundamental support necessary to support higher trade technically. Neither the cash market nor cutout values saw hardly any support this week, but maybe after the first of the year as supplies tighten in 2023 the circumstance could change. February lean hogs closed $0.97 lower at $87.70, April lean hogs closed $0.40 lower at $95.30 and June lean hogs closed $0.52 higher at $109.17. Pork cutouts totaled 262.59 loads with 243.01 loads of pork cuts and 19.59 loads of trim. Pork cutout values: up $0.02, $87.90. The CME Lean Hog Index for Dec. 28: up $0.05, $80.74.
Friday's slaughter is estimated at 477,000 head, 368,000 head more than a week ago and incomparable to a year ago. Saturday's slaughter is projected to be around 244,000 head. Thursday's slaughter was revised to 480,000 head.
Pork net sales of 15,100 mt for 2022 were primarily for Mexico (9,100 mt), Canada (1,600 mt) and China (1,600 mt).
TUESDAY'S HOG CALL: Steady. Packers won't likely come out in Tuesday's market overly aggressive but come Wednesday, the market could see higher trade.
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