DTN Livestock Midday: Contracts Bobble Their Way Into New Year

    ©Debra L Ferguson Stock Photography

    The livestock complex has had a stout case of Monday-morning frenzy, as the market tries to shake the doggish pace of the holidays and hit the ground running.

    GENERAL COMMENTS:

    The livestock complex is trading mixed into the New Year as the marketplace works to get a grasp on what’s ahead in the month and year to come. The lean hog market has many new changes headed its way with the onset of Prop 12.

    March corn is down 4 1/2 cents per bushel and March soybean meal is up $9.20. The Dow Jones Industrial Average is up 73.07 points and NASDAQ is up 103.93 points.

    LIVE CATTLE:

    Live cattle futures are trading sheepishly with no support helping drive the market higher. February live cattle are down $0.50 at $139.20, April live cattle are down $0.32 at $144.50 and June live cattle are down $0.17 at $139.02. It was surprising to see last week’s volume of 93,132 head traded in the cash market as ample as it was.

    Given that it was a holiday week, most would have anticipated the volume to be considerably smaller. But packers’ willingness to chase the market over the holiday tells us one clear thing: They need cattle.

    Heading into this week’s trade, it will be crucial to continue to monitor boxed beef prices (as higher prices will encourage packers to keep processing speeds elevated), daily slaughter speeds and Thursday’s export report (as an influx or decrease in sales could influence the market in the short term).

    Last week’s negotiated cash cattle trade totaled 93,132 head. Of that 71% (66,160 head) were committed for nearby delivery, while the remaining 29% (26,972 head) were committed for deferred delivery.

    Boxed beef prices are higher: choice up $0.88 ($266.14) and select up $0.33 ($258.56) with a movement of 52 loads (28.10 loads of choice, 6.72 loads of select, 8.38 loads of trim and 9.06 loads of ground beef).

    FEEDER CATTLE:

    Feeder cattle futures are taking Monday’s opportunity of weaker corn prices and rallying while the opportunity lasts. January feeders are up $0.15 at $167.02, March feeders are up $0.45 at $170.40 and April feeders are up $0.40 at $173.15.

    The corn market is nearing $6.00 a bushel and if corn does indeed break over that price point, the feeder market will feel greatly pressured. But Monday, order buyers are eager to jump into the market as they see potential in the upcoming months with the live cattle market and they haven’t been able to really buy cattle over the last two weeks.

    LEAN HOGS:

    Lean hog futures are trending cautiously into 2022 with hesitancy in nearby contracts and modest support in deferred contracts. February lean hogs are down $0.40 at $81.07, April lean hogs are down $0.07 at $86.57 and June lean hogs are up $0.15 at $97.70.

    The hog market has much to juggle as it tries to understand how Prop 12 will affect the marketplace. Historically speaking, the market doesn’t see a plethora of U.S. consumer demand through the first quarter, so both producers and packers are trying the gauge the market’s need amid the New Year.

    The projected CME Lean Hog Index for 12/30/2021 is up $0.10 at $71.85, and the actual index for 12/29/2021 is down $0.45 at $71.75. Hog prices can’t be compared to last week, but there have been 10,193 head sell with a weighted average price of $61.78, ranging from $60.50 to $66.50 and a five-day rolling average of $61.18.

    Pork cutouts total 216.46 loads with 183.48 loads of pork cuts and 32.98 loads of trim. Pork cutout values: down $2.75, $88.60.

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