Both pork cutout and boxed beef prices have shown some weakness early Tuesday, which could signal that prices are topping.
Tuesday’s market has shown a dip in both boxed beef and pork cutout prices. The market could grow stronger before the day’s end, but it’s not unlikely that prices are peaking.
March corn is up 8 cents per bushel and March soybean meal is down $0.30. The Dow Jones Industrial Average is down 293.66 points and NASDAQ is down 367.24 points.
Historically speaking, the boxed beef market has rallied into the first two to three weeks of January as retailers restock their coolers. But as February approaches the market levels out. That’s exactly what we are seeing in Tuesday’s beef market. February live cattle are up $0.17 at $136.50, April live cattle are down $0.35 at $139.75 and June live cattle are down $0.22 at $135.35.
The big concern is how much will boxed beef prices dip? Wanting the product to be more affordable for customers is a valid plea. But on the same token, if boxed beef prices dip too much, many packers may opt to run slow processing speeds, which would drastically hinder the market’s ability to fully capture a spring rally.
There’s been a little bit of cash cattle trade in the South at $137, which is fully steady with last week’s trad; but largely the market has yet to be tested and it is likely cash cattle wait to trade until Wednesday.
Asking prices are noted in the South at $138 and the North has yet to signal what they’re hoping to get.
Boxed beef prices are lower: choice down $0.16 ($293.34) and select down $0.14 ($284.65) with a movement of 84 loads (52.02 loads of choice, 8.50 loads of select, 7.31 loads of trim and 15.80 loads of ground beef).
With the corn market trading comfortably in the $6.20 per bushel range, the feeder cattle complex is nauseous. If feeders were trading substantially higher, the market could stomach the cost of these higher inputs. But making cattle pencil in today’s market takes a crafty mind and one who likes to look risk right in the eye. January feeders are down $0.07 at $158.40, March feeders are down $2.15 at $159.10 and April feeders are down $1.75 at $164.62.
Even with the morning cash trade and morning pork cutout values showing some weakness, the lean hog futures are rallying into Tuesday afternoon. February lean hogs are up $0.87 at $87.20, April lean hogs are up $1.55 at $96.87 and June lean hogs are up $0.72 at $106.67.
The market is still rallying on the excitement of what could come. With African swine fever plaguing numerous foreign countries, the U.S. market is crossing its fingers that export opportunities will only get more and more plentiful.
The projected CME Lean Hog Index for 1/21/2022 is up $0.81 at $78.32 and the actual index for 1/20/2022 is up $0.72 at $77.51. Hog prices are lower on the National Direct Morning Hog Report, down $0.56 with a weighted average of $61.25, ranging from $60.00 to $75.00 on 2,650 head and a five-day rolling average of $64.82. Pork cutouts total 204.20 loads with 184.07 loads of pork cuts and 20.13 loads of trim. Pork cutout values: down $0.12, $95.54.