Thursday Midday Livestock Market Update - Hogs Jump Higher While Cattle Pause

GENERAL COMMENTS:

The livestock complex is mixed heading into Thursday afternoon as the lean hog market continues to advance higher, the live cattle futures are chopping sideways and feeders are lower and watching the grain markets intensely. March corn is down 1/2 cent per bushel and March soybean meal is down $1.60. The Dow Jones Industrial Average is down 372.53 points and NASDAQ is down 239.71 points.

LIVE CATTLE:

The live cattle complex is continuing to chop sideways as the futures are unwilling to take on resistance at $148. Thursday's export report came as good news, but it wasn't a strong enough push in sales to really send the contracts jolting higher. The cash cattle market hasn't seen any more interest, but if this week's trade is going to amount to much, we still need to see some cattle sell -- especially in the North. For cattle left to sell, feedlots are asking $143-plus in the South and $227-plus in the North. February live cattle are up $0.22 at $143.35, April live cattle are down $0.30 at $146.62 and June live cattle are down $0.22 at $142.02. Showlists are extremely current and, with the market continuing to run fast chain speeds, front end supplies of market-ready cattle won't likely stress the cash market until summer.

Beef net export sales of 23,000 metric tons (mt) for 2022 were up 18% from the previous week and up 38% from the prior 4-week average. The three largest buyers were South Korea (10,100 mt), Japan (7,200 mt) and Canada (1,600 mt).

Boxed beef prices are mixed: choice up $0.70 ($270.32) and select down $0.64 ($265.44) with a movement of 105 loads (60.68 loads of choice, 21.87 loads of select, 14.95 loads of trim and 7.86 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex is sent trailing lower as the market can't find sufficient support. March feeders are down $1.40 at $166.05, April feeders are down $1.12 at $171.05 and May feeders are down $0.95 at $175.60. With the grain complex unable to level out due to the Ukraine/Russia circumstances, the feeder cattle complex will continue to dip-dodge accordingly to the grain market's developments as feed prices are so high and feeders have to be extremely cautious with their cost of gains.

LEAN HOGS:

The lean hog complex continues to push higher, higher and higher yet again! April lean hogs are up $1.72 at $107.12, June lean hogs are up $1.55 at $116.50 and July lean hogs are up $1.50 at $115.47. We know not to put too much faith into the midday pork cutout value, but with an uptick at noon over $11.00 stronger, it's very likely Thursday's afternoon report shares higher prices as well, which continues to add support to the already bullish market. Packers were aggressive in cash hog markets Tuesday and Wednesday, but come Thursday their willingness to keep chasing hogs grew thin as they secured enough supplies in the last two days for nearby needs. You may have thought the weaker export report would come as crushing news to the market, but the market understands there are cheaper hogs for foreign countries to buy and the pork export market isn't going to be as grandiose this year; thankfully domestic demand is as strong as it is.

Pork net export sales of 18,300 mt for 2022 were up 1% from the previous week but down 46% from the prior 4-week average. The three largest buyers were Mexico (4,800 mt), South Korea (3,400 mt) and Japan (3,300 mt).

The projected CME Lean Hog Index for 2/15/2022 is up $1.50 at $93.34 and the actual index for 2/14/2022 is up $1.33 at $91.84. Hog prices are not available due to confidentiality issues -- but we can see that 2,510 head have sold and the five-day moving average now sits at $84.75. Pork cutouts total 162.17 loads with 138.83 loads of pork cuts and 23.34 loads of trim. Pork cutout values: up $11.04, $117.56.

Thursday Morning Livestock Market Update - Traders Remain Optimistic

GENERAL COMMENTS:

Feedlots hoped they could see packers open their wallets and pay more for cattle this week, and that is what happened. Trade in both the North and South was generally $2.00 higher. Live cattle futures had that factored in, which leaves it in position to remain choppy for the rest of the week unless packers need more and will pay more to get them. However, with some cattle contracted for later delivery, the trend has likely been set for the week. Packers are not only purchasing for now but also for the next few weeks. Boxed beef was lower with choice down $0.75 and select down $1.74 maintaining only about a $3.00 spread between the two.

Hog futures pushed higher Wednesday with contracts posting a new higher close. The uptrend remains intact after being tested earlier this week. Further gains on the National Direct Afternoon Hog report of $2.06 provided strong support. It is likely packers may hold back the rest of the week, but with a strong slaughter pace, they may remain aggressive for another day. Cutouts slipped $0.20 leaving traders focusing on technical strength and cash strength. Weekly export sales need to be strong, or futures could face another price retracement. Saturday slaughter is always difficult to pin down so the current estimate has a range of 155,000 to 160,000 head.

	BULL SIDE		BEAR SIDE
1)	Cash cattle traded higher, indicating packers need cattle now and for the next few weeks.	1)	Cattle futures already have higher cash factored in, which could leave trading lethargic the rest of the week.
2)	Livestock futures are holding in a sideways trading range, building technical support.	2)	Continued weakness of boxed beef may eventually be an anchor weighing on the market, leaving packers less willing to pay higher for animals.
3)	Hog futures established new contract high closes, keeping the strong uptrend intact. Traders are confident of higher prices yet to come as supply tightens.	3)	If weekly export sales are less than stellar, futures could come under pressure.
4)	Increasing slaughter pace requires buyers to be more aggressive in the country as they need more animals. There is growing concern over supply as the year progresses.	4)	Packers may have purchased sufficient supply for the week, leaving them without the need to be aggressive and possibly reducing cash bids.

Wednesday Closing Livestock Market Update - Cash Cattle Gain $2 From Last Week

GENERAL COMMENTS:

The cattle complex will be anxious to see how Thursday's export report treats the market, but the lean hog complex knows the likelihood of it getting a robust export report is slim. Wednesday was a good day for the livestock contracts as both the live cattle and lean hog contracts closed higher on strong market fundamentals, but the feeder cattle complex grew weary amid a strong grain market. Hog prices closed higher on the National Direct Afternoon Hog Report, up $2.06 with a weighted average of $91.47 on 9,178 head. March corn is up 9 cents per bushel and March soybean meal is up $10.60. The Dow Jones Industrial Average is down 54.57 points and NASDAQ is down 15.66 points.

LIVE CATTLE:

Job well done feedlots! Following last week's tremendous volume of cash cattle traded (104,000 head), numerous analysts were worried the cash market was going to struggle this week as packers bought aggressively last week and were even able to get some cattle committed with time. Thankfully, throughout Wednesday we saw cattle in both the North and South trade for roughly $2.00 stronger amid the futures market's modest sideways chop. Once again, so much of next week's fate (and even the weeks after) depends on exactly how many cattle were committed with time today. As packers size up the likelihood of the cash cattle market rallying this spring, they are preparing their position (negate the cash market's ability to rally) by buying cattle with time and lessening their needs in the future. There were some brave hearts still holding out for $143-plus in the South and $227 to $228 in the North. If trade could have been delayed by another day, perhaps the entire market could have gotten those prices. Throughout the day trade in the South was marked at $142 and dressed deals in the North went for $226 -- both $2.00 higher than a week ago. Of the cattle that sold in the North, most of them were sold with time for the week of Feb. 28. Wednesday's slaughter is estimated at 122,000 head -- steady with last week and 22,000 head more than a year ago.

Boxed beef prices closed lower: choice down $0.75 ($269.62) and select down $1.74 ($266.08) with a movement of 111 loads (76.60 loads of choice, 13.89 loads of select, 9.37 loads of trim and 11.42 loads of ground beef).

THURSDAY'S CASH CATTLE CALL: Steady with the week's trend. Given that cattle have sold in the North and South, prices will likely trade steady now for the remainder of the week.

FEEDER CATTLE:

The corn complex closed higher and the soybean market jumped over the moon (again, and again, and again) which drove feeders lower by Wednesday's close. March feeders closed $1.27 lower at $167.45, April feeders closed $0.37 lower at $172.17 and May feeders closed $0.37 lower at $176.55. With pressure from the grain complex more that the feeder futures could bear, buyers drew back in some sale barns as well as they need to intensely monitor their cost of gains. At Bassett Livestock Auction in Bassett, Nebraska, compared to the sale two weeks ago, on a run of 3,135 head, feeder steers weighing 750 pounds traded $7.00 lower, heifers weighing 550 pounds, and those weighing 650 to 700 pounds traded steady, but the six weight heifers traded $4.00 higher. The CME Feeder Cattle Index 2/15/2022: down $0.12, $162.59.

LEAN HOGS:

It was an exhilarating day for the lean hog complex as the market saw tremendous support from all sides. The futures market tested resistance and closed modestly higher in some contracts and fully steady with the resistance point in others. Either way, the tremendous support technically was aided by the cash hog market and aggressive throughput. You probably noticed pork cutout values closed lower; but seeing a modest regression of $0.20 comes as breath of fresh air as the market has gotten used to seeing $6.00 to $12.00 swings daily. Pork cutouts total 231.31 loads with 196.62 loads of pork cuts and 34.68 loads of trim. Pork cutout values: down $0.20, $106.52. Wednesday's slaughter is estimated at 478,000 head -- 6,000 head more than a week ago and 5,000 head more than a year ago. The CME Lean Hog Index 2/14/2022: up $1.33, $91.84.

THURSDAY'S CASH HOG CALL: Slightly lower. Given that the market has had two days now where cash hogs were fully supported, I tend to bet cash prices will be slightly lower come Thursday. As packers sit comfortably with their needs mostly met, their aggression in the cash market will likely be considerably less.

Wednesday Midday Livestock Market Update - Feedlots Wait Patiently

GENERAL COMMENTS:

It's a good day to be a livestock enthusiast and the three contracts are all trading higher. The lean hog complex is gaining in confidence as support is seen from all angles. The live cattle complex is trading higher and praying feedlots can champion the week with higher cash cattle trade. Time will tell. March corn is up 7 cents per bushel and March soybean meal is up $9.70. The Dow Jones Industrial Average is down 215.41 points and NASDAQ is down 131.88 points.

LIVE CATTLE:

Waiting is the name of today's game and I tip my hat to feedlots as they dig their heels in and let time pass, knowing they'll have to play tough to get the prices they want. Asking prices are $143-plus in the South and $227 to $228 in the North. Packer interest hasn't been much as of yet, but it will likely get stronger as the day trades on. Helping feeders remain confident is the simple fact that it's a green day for the live cattle contracts as the entire futures market trades higher. February live cattle are up $1.00 at $143.90, April live cattle are up $0.72 at $147.60 and June live cattle are up $0.80 at $142.90. Bids of $142 have been passed up by some in Nebraska but some others are willing to take the offer, and some trade at $142 is beginning to develop in Kansas and Texas, which is $2.00 higher than last week's business.

The Fed Cattle Exchange Auction listed a total of 2,096 head, of which 1,496 actually sold, 220 were scratched from the auction and 380 head were listed as unsold, as they did not meet the reserve prices, which ranged from $142 to $145. Opening prices ranged from $139 to $140, high bids ranged from $139 to $142.50. The state-by-state breakdown looks like this: Texas 1,496 total head with 1,214 head sold at $142.00 to $142.50, 62 head went unsold and 220 head were scratched from the auction; Kansas 353 total head with 282 head sold at $141.25 to $142.25 and 71 head went unsold; Oklahoma 63 total head, all of which went unsold; California 69 total head, all of which went unsold; Iowa 115 total head, all of which went unsold.

Boxed beef prices are lower: choice down $0.92 ($269.45) and select down $2.11 ($265.71) with a movement of 74 loads (50.73 loads of choice, 9.45 loads of select, 7.44 loads of trim and 6.21 loads of ground beef).

FEEDER CATTLE:

You would think feeder cattle futures would be sweating over the corn and soybean rally, but the complex has its eyes locked on the upward trend that's developing in the live cattle contracts and continues to cling to the support that's being seen in sale barns. March feeders are down $0.60 at $168.12, April feeders are up $0.65 at $173.17 and May feeders are up $0.60 at $0.60 at $117.52. If the cash cattle market can pull off steady to higher trade this week, then the feeder cattle complex will likely keep its upward trajectory.

LEAN HOGS:

The lean hog complex is having a grandiose day with the futures market rallying $1.00 to $2.00 higher in its nearby contracts, the cash market jumping substantially and pork cutout prices higher at midday. April lean hogs are up $2.07 at $106.22, June lean hogs are up $1.75 at $115.45 and July lean hogs are up $1.70 at $114.62. The market is at the point where it's testing long-time resistance and the resistance levels last week's market backed away from. Seeing how Wednesday closes will be incredibly insightful.

The projected CME Lean Hog Index for 2/15/2022 is up $1.51 with a weighted average of $93.35, and the actual index for 2/14/2022 is up $1.33 at $91.84. Hog prices are higher on the National Direct Morning Hog Report up $11.20 with a weighted average of $89.94, ranging from $80.00 to $98.00 on 6,504 head and a five-day rolling average of $84.20. Pork cutouts total 146.97 loads with 118.39 loads of pork cuts and 28.58 loads of trim. Pork cutout values: up $3.65, $110.37.