DTN Midday Livestock Comments 01/20 11:40
Live Cattle, Feeder Cattle Sink Lower
The lean hog complex is worried about posting another day of gains, but the
same mindset isn't fueling the cattle contracts higher.
DTN Livestock Analyst
Live and feeder cattle futures jumped into Thursday's market, hoping to keep
with Wednesday's higher trend. But traders quickly rerouted their trajectory
and are leading both the markets lower. It's looking like cash cattle trade is
all but done with, though some light clean-up deals could develop. March corn
is up 1 1/2 cents per bushel and March soybean meal is up $4.20. The Dow Jones
Industrial Average is up 328.50 points and NASDAQ is up 231.11 points.
Live cattle futures started strong, thinking Thursday may be another day
with rallying potential. But as traders sat down and got to business, they
quickly rethought their position. February live cattle are down $0.30 at
$138.25, April live cattle are down $0.47 at $142.87 and June live cattle are
down $0.30 at $138.17. Heading into Thursday afternoon, it will be interesting
to see how carcass weights fluctuated from the last report of actual slaughter
data. And, again, it will be crucial to keep close tabs on the day's slaughter.
The cash cattle market has been quiet Thursday and it's likely the week's
business is done.
So far this week, Northern dressed deals have been marked at mostly $218,
fully steady with last week's weighted averages. A good many of these cattle
are set for delivery the week of Jan. 31 and Feb. 7. Southern live transactions
have been at mostly $137, $1 to $1.50 higher than last week's weighted averages.
Boxed beef prices are higher: choice up $1.50 ($293.10) and select up $2.40
($282.83) with a movement of 78 loads (56.44 loads of choice, 10.75 loads of
select, zero loads of trim and 10.90 loads of ground beef).
Starting Thursday, feeder cattle futures were rallying as traders still
seemed interested. But as the noon hour nears, feeder cattle contracts are
retreating. January feeders are down $0.22 at $161.17, March feeders are down
$0.95 at $164.67 and April feeders are down $0.77 at $169.27. The corn market
isn't even to blame for Thursday's weakness as corn contracts are trading
mostly steady after Wednesday's wild advancement. Largely, the feeder cattle
contracts are lower on a pullback from traders and with the live cattle
contracts now lower too, the market is apprehensive about being too bullish.
Lean hog futures don't seem to care that the cattle contracts are backing
off their bullish push as the hog contracts just keep reaching for more.
February lean hogs are up $0.82 at $83.15, April lean hogs are up $1.17 at
$92.52 and June lean hogs are up $1.15 at $103.02. The push is largely
technically driven as fundamentals are sinking backward. Cash hog prices are
down hard and pork cutout values are retracking. But the day isn't over until
we've seen the afternoon reports.
The projected CME Lean Hog Index for 1/19/2022 is down $0.06 at $76.79, and
the actual index for 1/18/2022 is up $0.07 at $76.85. Hog prices are lower on
the National Direct Morning Hog Report, down $8.93 with a weighted average of
$61.14, ranging from $60.00 to $73.00 on 2,622 head and a five-day rolling
average of $66.40. Pork cutouts total 132.17 loads with 114.07 loads of pork
cuts and 18.10 loads of trim. Pork cutout values: down $3.04, $92.43.
ShayLe Stewart can be reached firstname.lastname@example.org
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