Cattle Contracts Trend Lower – AgFax

The live cattle and feeder cattle contracts are trending lower into Friday afternoon while the lean hog complex sets out to gain whatever it can ahead of the afternoon’s closing bell.

GENERAL COMMENTS:

The live cattle and feeder cattle contracts aren’t too overly confident about pushing prices higher ahead of the weekend, but the lean hog market is giving it a shot. For the most part the lean hog complex is trending higher, but the summer months where the market’s higher premiums lay are still trending mildly lower.

March corn is up 3 1/4 cents per bushel and March soybean meal is up $4.80. The Dow Jones Industrial Average is up 9.12 points and NASDAQ is down 86.69 points.

LIVE CATTLE:

The live cattle complex is keeping with Thursday’s tone and continues to trade lower into Friday afternoon. February live cattle are down $0.57 at $141.77, April live cattle are down $0.77 at $146.07 and June live cattle are down $0.47 at $141.12.

The complex has all but tapped out of the market for the week as traders aren’t interested in doing much ahead of the weekend and the cash cattle market sits stale with no new trade having developed. The dry realization of this week’s trade isn’t that the futures complex is trending lower in the latter half of the week, but that the cash cattle market will face some headwinds in the weeks to come as packers were able to buy cattle with time this past week.

In the North some cattle were able to trade sharply higher (around $226 which is $4.00 higher than last week’s business) but that price tag came with some fine print — the cattle were committed for the week of Feb. 21. We knew at some point packers were going to bump the brakes on the cash cattle market and that’s how they ended up doing so.

It will be important to keep watch for Monday’s report to see exactly how many cattle were bought for deferred delivery. The more cattle that are committed with time, the tougher it gets on the current cash cattle market.

So far this week Northern dressed trade has ranged from $222 to $227, mostly $224, $2 higher than last week’s weighted averages. Southern live transactions have had a range of $138 to mostly $140, generally steady with last week’s weighted averages. There could be some more clean-up trade that develops ahead of the weekend, but it most likely won’t amount to much.

Boxed beef prices are lower: choice down $0.10 ($274.72) and select down $1.11 ($267.84) with a thin movement of 37 loads (27.14 loads of choice, 2.98 loads of select, zero loads of trim and 6.95 loads of ground beef).

FEEDER CATTLE:

After taking a dive lower through Thursday’s close, the feeder cattle contracts aren’t Friday’s market with much aggression as the complex sees the grain contracts trading mildly higher and doesn’t feel as if the technical support is strong enough to regain what Thursday lost .

March feeders are down $0.60 at $166.12, April feeders are down $1.02 at $170.72 and May feeders are down $1.05 at $174.82. It’s likely the complex will continue to trade lower through Friday’s close and will reevaluate the market come Monday before aspiring for higher prices.

LEAN HOGS:

In terms of the lean hog complex, the futures market is barging into Friday’s trade trying to regain some of the market’s lost position ahead of the weekend. In terms of the pork cutout value, I tend to think it’s drunk.

The futures market is mostly battling for higher prices as the noon hour nears, but the months of April through July 2022 continue to trade mildly lower after Thursday’s bloodbath. Still those months are trading higher than any other time on the board and even though exports haven’t been as fruitful as hoped, domestic demand is strong and supplies are thin, which is a winning equation for producers.

April lean hogs are down $0.22 at $103.12, June lean hogs are down $0.55 at $112.97 and July lean hogs are down $0.25 at $112.40.

The projected CME Lean Hog ​​Index for 2/10/2022 is up $1.18 at $88.92, and the actual index for 2/9/2022 is up $0.52 at $87.74. Hog prices are higher on the National Direct Morning Hog Report, up $0.67 with a weighted average of $81.48, ranging from $74.00 to $93.00 on 4,362 head and a five-day rolling average of $76.65.

Pork cutouts total 208.19 loads with 187.04 loads of pork cuts and 21.16 loads of trim. Pork cutout values: up $12.47, $113.95.

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