DTN Midday Livestock Comments 01/21 12:19
Cattle Futures Sag Lower Friday; Hogs Push New Highs
Active contracts of live cattle and feeders were lower at midday, on track
for small losses on the week. February lean hogs were higher, however,
threatening to close at a new three-month high.
DTN Lead Analyst
Most of Friday's commodity board was painted red, including the active
futures contracts of live cattle and feeder cattle. It has been a fairly quiet
week for cattle on the futures board as markets are cautious about the lower
slaughter pace and this week's higher corn prices. Hog prices are having a much
more bullish week, supported by low inventories and a good week of pork export
sales reported Friday morning. March corn is up 3 cents per bushel and March
soybean meal is down $8.20. The Dow Jones Industrial Average is down 60 points
and NASDAQ is down 92 points.
Cattle contracts started lower Friday and have kept a low profile during the
four-day week, following Martin Luther King Jr. Day. February live cattle are
down $0.45 at $137.87, April live cattle are down $0.97 at $142.20 and June
live cattle are down $0.85 at $137.52. This week's cash cattle trade was mostly
seen at $137 in the South, up $1.00 to $1.50 from last week's weighted
averages. In the North, trades have been mostly steady, near $218. If there is
light trade remaining Friday, we haven't seen it yet.
Thursday's carcass weights were steady for steers at 928 pounds and four
pounds lower for heifers at 851 pounds. Steer weights are up 16 pounds from a
year ago and present some concern during this time of high coronavirus cases
and lower slaughter rates. Thursday's slaughter did show some improvement
however, estimated by USDA at 116,000 -- up from 114,000 the previous week.
Friday morning's choice boxed beef prices were down $0.26 at $292.72 and
selects were up $0.49 at $282.67 with 46 total loads. Boxed prices are on track
for gains of roughly $8 to $9 from last Friday, continuing to climb higher
At 2 p.m. CST, USDA will release its cattle on-feed report for January 1,
2022. Pre-report estimates from Dow Jones expect USDA to find 11.929 million
head on-feed, down 0.3% from a year ago. December placements are expected to
come in 1.8% higher and marketings are expected to be 0.9% higher.
March feeders are down $1.35 at $163.60 and the January contract is down
$0.60 at $160.57, set to expire Thursday, Jan. 27. Wednesday's CME Feeder Index
was listed at $161.20. With dry weather concerns in South America and the
conflict in Ukraine giving corn prices a boost this week, feeder cattle appear
to be headed for a lower close, both for Friday and for the week. This week's
lower stock market and ongoing concerns about the slower pace of cattle
slaughter backing up cattle are also not helping feeder prices. With so many
bearish headwinds this week, it says something about underlying demand to see
March feeder cattle still holding above their 100-day average at $162.80.
February lean hogs are up $1.32 at $86.25, April lean hogs are up $1.20 at
$95.20 and June lean hogs are up $1.12 at $104.95. Futures prices continue to
look much more bullish than cash with the April and June contracts on track to
finish the week with new contract highs. The projected CME Lean Hog Index for
Thursday, Jan. 20 is $77.51, up from the actual index of $76.79 for Wednesday.
Friday morning's Pork Market Formula price from USDA's morning hog report
showed a weighted average price of $78.80 with a head count of 112,085, steady
with Thursday morning's price. The negotiated weighted average was at $60.45
with a head count of 2,865, down from $61.14 Thursday. Overall, cash hog prices
bottomed near Thanksgiving and have been slowly increasing since, following the
bullish trail of much higher futures prices. USDA's morning report showed pork
cutouts up $8.05 at $100.29 on 132.06 loads. Bellies, hams and butts were the
popular cuts pushing the carcass value higher. If Friday morning's values hold,
pork cutouts would be up roughly $11 on the week.
Todd Hultman can be reached at firstname.lastname@example.org
Follow him on Twitter @ToddHultman1
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