The lean hog complex is worried about posting another day of gains, but the same mindset isn’t fueling the cattle contracts higher.
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.