DTN Midday Livestock Comments 01/28 11:45
Cattle Lean Confidently Into Friday Afternoon While Hogs Retreat
Heading into Friday afternoon, the cattle contracts are hoping to hold the
market's support through closing.
DTN Livestock Analyst
The lean hog complex has slowed its upward quest as the weekend nears, but
the cattle contracts are rallying into Friday afternoon, thrilled to have
gained some much-needed support. The feeder cattle contracts could still close
lower as the market closely watches the rallying corn and soybean markets.
March corn is up 10 3/4 cents per bushel and March soybean meal is up $4.20.
The Dow Jones Industrial Average is up 104.62 points and NASDAQ is up 216.00
Upon seeing some midday boxed beef prices higher, the live cattle complex
stretched its position to trade fully higher and head into Friday afternoon
with confidence. Overall, it's been a lukewarm week for the live cattle market.
Though processing speeds have improved, they still aren't back to full
capacity. Not to mention boxed beef prices trended lower throughout most of the
week and the cash cattle market saw very little interest. February live cattle
are up $0.92 at $138.75, April live cattle are up $1.37 at $143.00 and June
live cattle are up $1.23 at $137.92. While the market balances the supportive
and non-supportive factors, it is encouraging to see the April live cattle
contract trading well above $140. The cash cattle market hasn't seen any
renewed interest and it's likely the week's business is done.
This week Southern live deals have been marked at $135 to $138, mostly $136
to $137, steady to $1 lower than last week's weighted averages. Northern
dressed business has been marked at $217 to $218, mostly $218, fully steady
with last week's weighted average basis Nebraska. Beef cutouts are expected to
be lower with light to moderate box movement.
Boxed beef prices are higher: choice up $1.54 ($290.65) and select up $3.90
($283.00) with a movement of 55 loads (38.30 loads of choice, 4.55 loads of
select, 8.97 loads of trim and 3.55 loads of ground beef).
The feeder cattle contracts are rallying as the market clings to the support
that seeped in from the live cattle complex, even though both corn and soybean
prices are trading higher. The feeder cattle market nosedived in the nearby
contracts to the support level at the 100-day moving average and has traded
mostly sideways ever since. The market stands a chance at closing mildly higher
by the day's end if the live cattle contracts continue to trade positively. But
it likely won't be much better than steady as demand has been touch-and-go
throughout the countryside and inputs are back to rallying. March feeders are
up $0.55 at $160.05, April feeders are up $0.40 at $165.50 and May feeders are
up $0.80 at $170.12.
After a topsy-turvy week, the lean hog complex is trading lower into Friday
afternoon. The lean hog market had a volatile week where cash prices saw huge
spreads, pork cutout values continued to jet higher and then close lower the
next day, and the futures market ran with vigor early in the week but has now
taken a more cautious approach in the second half of the week. February lean
hogs are up $0.07 at $87.10, April lean hogs are down $0.20 at $94.47 and June
lean hogs are down $0.07 at $105.10. It's likely the day closes lower and the
market doesn't find support nor a clear trajectory until next week (hopefully).
The projected CME Lean Hog Index for 1/27/2022 is up $0.86 at $80.61, and
the actual index for 1/26/2022 is up $0.55 at $79.75. Hog prices are lower on
the National Direct Morning Hog Report, down $4.12 with a weighted average of
$64.52, ranging from $63.00 to $77.50 on 2,660 head and a five-day rolling
average of $64.15. Pork cutouts total 167.80 loads with 152.69 loads of pork
cuts and 15.11 loads of trim. Pork cutout values: down $0.15, $98.04.
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 email@example.com
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