DTN Livestock Close: Last-Minute Support for Futures

    Photo: Blair Fannin, Texas AgriLife Extension

    Heading into Friday afternoon, the livestock complex is met with enough trader support that the contracts are enjoying a little stronger trade.

    GENERAL COMMENTS:

    The livestock complex has traded mixed throughout most of Friday so far as the cattle contracts soak up any support that traders will lend. However, the nearby lean hog contracts aren’t as optimistic. Thankfully Friday’s WASDE report didn’t share anything unnerving, and the livestock contracts should be able to carry onward with their mildly higher prices into Friday afternoon.

    May corn is up 10 cents per bushel and May soybean meal is up $5.90. The Dow Jones Industrial Average is up 228.37 points and NASDAQ is down 96.52 points.

    LIVE CATTLE:

    The feeding sector was thankful to see that Friday’s WASDE report kept its estimate of the 2021-2022 U.S. ending corn stocks unchanged at 1.440 billion bushels (bb). With feed prices already high, cattlemen will be watching planting reports closely this year. Nevertheless, the live cattle complex is keeping with its upward trend into Friday afternoon as traders weren’t caught off guard by anything in the WASDE report. April live cattle are up $0.30 at $138.30, June live cattle are up $0.55 at $134.62 and August live cattle are up $0.42 at $136.52.

    In Friday’s WASDE Report, beef production grew by 140 million pounds from last month’s report as higher placements bolster vigorous processing speeds. In addition, the market continues to see more non-fed cattle slaughter than years past due to drought conditions.

    Quarterly prices saw minute changes from last month’s report as the first quarter fell by $0.75 to average $139.25, the second quarter held steady at $139.00, the third quarter remained steady at $136.00 but the fourth quarter grew $1.00 stronger to average $143.00. Once again, beef imports grew by 20 million pounds and exports held steady at 3,300,000 million pounds.

    The cash cattle market is idle as most of the week’s business is essentially done. Throughout the week Southern live cattle have traded for $138 (steady with last week) and Northern dressed cattle have traded for $222 (steady as well). Asking prices for cattle left on showlists remain at $139 to $140 in the South and at $224 to $225 in the North.

    Boxed beef prices are lower: choice down $0.33 ($271.07) and select down $0.84 ($260.38) with a movement of 61 loads (35.31 loads of choice, 7.82 loads of select, 8.25 loads of trim and 9.48 loads of ground beef).

    FEEDER CATTLE:

    As odd as it may seem, despite the grain complex continuing with its upward surge, the feeder cattle contracts are trading mostly higher, as the market has found support around $159. Buyers are in a tough position as they know the writing on the wall thanks to what the market did in 2012 through 2015.

    But with feed prices showing no mercy, buyers have to juggle the expense of getting the cattle they buy today into the market that’s going to be hot later in 2022 and into 2023. April feeders are up $0.52 at $156.92, May feeders are up $0.57 at $160.02 and August feeders are down $0.20 at $174.07.

    LEAN HOGS:

    Nearby lean hog futures are again faced with a bitter environment while traders feel safer putting their positions in the market’s deferred contracts. Packer margins have waned and as packers feel the pinch of limited supplies and hit-and-miss consumer interest, their willingness to dive into the market with no questions asked is a thing of the past for now. April lean hogs are down $0.17 at $98.87, June lean hogs are down $0.15 at $114.00 and July lean hogs are down $0.07 at $115.12.

    Friday’s WASDE report shared that pork production fell by 240 million pounds from last month’s report as tight packer margins slow processing speeds and the latest Quarterly Hogs and Pigs report shared that producers intended to reduce farrowings in March through May. Quarterly prices grew from March’s WASDE report as demand continues to remain excellent.

    First quarter prices were the only quarter to fall from a month ago as they dropped $0.45 to average $65.55, but the second quarter gained $2.00 to average $80.00, the third quarter gained $2.00 to average $77.00 and the fourth quarter jumped $4.00 to average $69.00. Imports grew by 15 million pounds and exports fell by 135 million pounds as U.S. hog prices are higher than other countries.

    The projected CME Lean Hog Index for 4/7/2022 is down $0.62 at $100.06, and the actual index for 4/6/2022 is down $0.40 at $100.68. Hog prices are lower on the Daily Direct Morning Hog Report, down $3.70 with a weighted average of $96.53, ranging from $96.00 to $100.75 on 3,030 head and a five-day rolling average of $99.91. Pork cutouts total 168.92 loads with 155.09 loads of pork cuts and 13.83 loads of trim. Pork cutout values: up $3.53, $106.64.

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