DTN Midday Livestock Comments 01/24 12:37
Hogs Look for Continued Support While Cattle Veer Lower
The cattle and lean hog futures are faced with different trajectories
heading into the new week as the cattle contracts continue to worry over
Friday's Cattle on Feed report.
DTN Livestock Analyst
The livestock complex is a mixed bag heading into Monday afternoon. Lean hog
futures are partly keeping with last week's rally, but the cattle futures are
trending lower as the market frets over last week's Cattle on Feed report.
March corn is down 1 1/4 cents per bushel and March soybean meal is down $2.10.
The Dow Jones Industrial Average is down 975.42 points and NASDAQ is down
Live cattle futures are taking a jolting ride to lower prices as the market
reacts emotionally to Friday's Cattle on Feed report. February live cattle are
down $2.10 at $135.82, April live cattle are down $2.80 at $139.30 and June
live cattle are down $2.40 at $134.90. If feedlots get anxious and sell early
this week, packers are undoubtedly going to push for lower prices. But if
feedlots can stand united and push trade to the latter half of the week, the
market stands a better chance at trading steady to potentially higher. The
Cattle on Feed report may have your spirits weakened as a 6% jump in placements
seems unmanageable -- but remember that given the year producers have face,
where else were the cattle supposed to go? Thankfully, the market saw the
lighter weight feeders more heavily placed than heavier cattle, which means
those cattle won't be marketed until summer, so the spring rally won't be
oversupplied. New showlists appear to be mixed: higher in Kansas, but lower in
Texas, Nebraska and Colorado.
The majority of business took place on Tuesday and Wednesday last week, with
just a little scattered trade on both Thursday and Friday. Northern dressed
deals had a range of $217 to $218, mostly $218, generally steady with the prior
week's weighted averages, a good many of these cattle are set for delivery in
the weeks of Jan. 31 and Feb. 7. Southern live trade had a full range of
$135.50 to $137, mostly $137, $1 to $1.50 higher than the previous week's
Last week's negotiated cash cattle trade totaled 74,145 head. Of that 72%
(53,164 head) were committed for nearby delivery, while the remaining 28%
(20,981 head) sold for deferred delivery.
Boxed beef prices are higher: choice up $0.35 ($292.76) and select up $1.69
($284.02) with a movement of 26 loads (17.93 loads of choice, 4.39 loads of
select, 0.02 loads of trim and 3.80 loads of ground beef).
With the live cattle complex trending lower and placements already taking up
a large majority of feed bunk space, the feeder cattle complex is trending in a
worried fashion. January feeders are down $2.00 at $158.27, March feeders are
down $4.47 at $158.82 and April feeders are down $3.77 at $164.40. Adding to
the market's disgruntled attitude is the fact that nearby corn prices are still
trading well above $6.00 a bushel. So it wouldn't be surprising to see feeder
cattle buyers hesitant in sale barns early this week.
After a long period of hem-hawing around and wondering whether the market
should keep with last week's robust rally, lean hog futures have begun to trade
mildly higher in the nearby contracts. February lean hogs are up $0.35 at
$86.55, April lean hogs are down $0.07 at $94.92 and June lean hogs are up
$0.45 at $105.25. With the cash market seeing support, and with pork cutout
values seeing interest at midday, traders are hopeful the market will continue
to see demand and keep with its quest of higher prices.
The projected CME Lean Hog Index for 1/20/2022 is up $0.72 at $77.51 and the
actual index for 1/19/2022 is down $0.06 at $76.79. Hog prices are higher on
the National Direct Morning Hog Report, up $1.36 with a weighted average of
$61.81, ranging from $60.00 to $75.00 on 2,405 head and a five-day rolling
average of $65.44. Pork cutouts total 210.15 loads with 182.67 loads of pork
cuts and 27.48 loads of trim. Pork cutout values: up $8.89, $102.18.
DTN Livestock Analyst ShayLe Stewart will be at the NCBA convention in
Houston Feb. 1-3. Stop by the DTN/Progressive Farmer booth and meet her.
ShayLe Stewart can be reached at firstname.lastname@example.org
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