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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. 

ShayLe Stewart
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

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