DTN Midday Livestock Comments          01/24 12:37

   Hogs Look for Continued Support While Cattle Veer Lower  

   The cattle and lean hog futures are faced with different trajectories 
heading into the new week as the cattle contracts continue to worry over 
Friday's Cattle on Feed report. 

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

   The livestock complex is a mixed bag heading into Monday afternoon. Lean hog 
futures are partly keeping with last week's rally, but the cattle futures are 
trending lower as the market frets over last week's Cattle on Feed report. 
March corn is down 1 1/4 cents per bushel and March soybean meal is down $2.10. 
The Dow Jones Industrial Average is down 975.42 points and NASDAQ is down 
593.98 points.

LIVE CATTLE:

   Live cattle futures are taking a jolting ride to lower prices as the market 
reacts emotionally to Friday's Cattle on Feed report. February live cattle are 
down $2.10 at $135.82, April live cattle are down $2.80 at $139.30 and June 
live cattle are down $2.40 at $134.90. If feedlots get anxious and sell early 
this week, packers are undoubtedly going to push for lower prices. But if 
feedlots can stand united and push trade to the latter half of the week, the 
market stands a better chance at trading steady to potentially higher. The 
Cattle on Feed report may have your spirits weakened as a 6% jump in placements 
seems unmanageable -- but remember that given the year producers have face, 
where else were the cattle supposed to go? Thankfully, the market saw the 
lighter weight feeders more heavily placed than heavier cattle, which means 
those cattle won't be marketed until summer, so the spring rally won't be 
oversupplied. New showlists appear to be mixed: higher in Kansas, but lower in 
Texas, Nebraska and Colorado.

   The majority of business took place on Tuesday and Wednesday last week, with 
just a little scattered trade on both Thursday and Friday. Northern dressed 
deals had a range of $217 to $218, mostly $218, generally steady with the prior 
week's weighted averages, a good many of these cattle are set for delivery in 
the weeks of Jan. 31 and Feb. 7. Southern live trade had a full range of 
$135.50 to $137, mostly $137, $1 to $1.50 higher than the previous week's 
weighted averages.

   Last week's negotiated cash cattle trade totaled 74,145 head. Of that 72% 
(53,164 head) were committed for nearby delivery, while the remaining 28% 
(20,981 head) sold for deferred delivery.

   Boxed beef prices are higher: choice up $0.35 ($292.76) and select up $1.69 
($284.02) with a movement of 26 loads (17.93 loads of choice, 4.39 loads of 
select, 0.02 loads of trim and 3.80 loads of ground beef).

FEEDER CATTLE:

   With the live cattle complex trending lower and placements already taking up 
a large majority of feed bunk space, the feeder cattle complex is trending in a 
worried fashion. January feeders are down $2.00 at $158.27, March feeders are 
down $4.47 at $158.82 and April feeders are down $3.77 at $164.40. Adding to 
the market's disgruntled attitude is the fact that nearby corn prices are still 
trading well above $6.00 a bushel. So it wouldn't be surprising to see feeder 
cattle buyers hesitant in sale barns early this week.

LEAN HOGS:

   After a long period of hem-hawing around and wondering whether the market 
should keep with last week's robust rally, lean hog futures have begun to trade 
mildly higher in the nearby contracts. February lean hogs are up $0.35 at 
$86.55, April lean hogs are down $0.07 at $94.92 and June lean hogs are up 
$0.45 at $105.25. With the cash market seeing support, and with pork cutout 
values seeing interest at midday, traders are hopeful the market will continue 
to see demand and keep with its quest of higher prices.

   The projected CME Lean Hog Index for 1/20/2022 is up $0.72 at $77.51 and the 
actual index for 1/19/2022 is down $0.06 at $76.79. Hog prices are higher on 
the National Direct Morning Hog Report, up $1.36 with a weighted average of 
$61.81, ranging from $60.00 to $75.00 on 2,405 head and a five-day rolling 
average of $65.44. Pork cutouts total 210.15 loads with 182.67 loads of pork 
cuts and 27.48 loads of trim. Pork cutout values: up $8.89, $102.18.

   ***

   DTN Livestock Analyst ShayLe Stewart will be at the NCBA convention in 
Houston Feb. 1-3. Stop by the DTN/Progressive Farmer booth and meet her.

   ShayLe Stewart can be reached at shayle.stewart@dtn.com




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