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DTN Midday Livestock Comments          01/19 11:42

   Livestock Contracts Jump Higher 

   Wednesday's market has served as an opportunity for the livestock contracts 
to trade higher and the markets haven't wasted any time in doing so. 

ShayLe Stewart
DTN Livestock Analyst


   It's a strong day for the livestock contracts as the markets are rallying in 
an aggressive manner. The only market trading mixed is the feeder cattle 
contracts; with corn prices shooting higher it makes sense that the market is 
teetering in its position. March corn is up 13 cents per bushel and March 
soybean meal is up $8.70. The Dow Jones Industrial Average is up 96.17 points 
and NASDAQ is up 78.18 points.


   Wednesday's cattle slaughter is anticipated to hit 117,000 head, which would 
be the second time this week the market has achieved that level. The live 
cattle complex is relieved to see progress being made on the packing front as 
feedlots desperately want to maintain the currentness the market sought in the 
latter part of 2021. February live cattle are up $1.32 at $139.00, April live 
cattle are up $1.70 at $143.55 and June live cattle are up $1.55 at $138.62. 
Thankfully this hiccup in the market has come at a time when boxed beef prices 
are very lucrative for packers, so while they don't like paying generously in 
the cash cattle market, they will likely support the market as they want to 
keep enough cattle in the pipe to chase the dividends that boxes are giving 
right now. The disappointing piece about this week's trade is that the cash 
trade puked cattle early in the week, so packers have gotten cattle bought at 
weaker prices. If feedlots would have waited until later in the week to trade, 
the market may have been able to hold prices steady with a week ago. Another 
round of light trade is being reported in the South at $137, which is $1.00 to 
$1.50 lower than last week. More trade has also been noted in the North for 
$218, which is steady with last week's trade, but a large percentage of the 
cattle trading dressed are also trading with time.

   The Fed Cattle Exchange Auction listed a total of 3,580 head, of which none 
actually sold, 159 were scratched from the auction and 3,421 head were listed 
as unsold, as they did not meet the reserve prices, that ranged from $125 to 
$139.50 Opening prices ranged from $122 to $136, high bids ranged from $134 to 
$138. The state-by-state breakdown looks like this: Texas 1,008 total head, all 
of which went unsold; Kansas 1,301 total head, 1,142 head went unsold and 159 
head were scratched from the auction; Nebraska 1,233 total head, all of which 
went unsold; California 38 total head, all of which went unsold.

   Boxed beef prices are higher: choice up $1.56 ($291.05) and select up $1.32 
($279.71) with a movement of 78 loads (42.87 loads of choice, 11.50 loads of 
select, 10.66 loads of trim and 13.43 loads of ground beef).


   Feeder cattle contracts are walking a tightrope Wednesday as the complex 
would love to trade higher along with the rest of the livestock sector, but 
with corn prices well above $6.00 a bushel (and trading closer to the $6.10 to 
$6.14 mark in the nearby contracts) feeders are again weighing the pros and 
cons of the market. January feeders are down $0.45 at $161.00, March feeders 
are up $0.02 at $165.45 and April feeders are up $0.05 at $169.62. It wouldn't 
be surprising to see order buyers take a removed position in sales this week as 
they look to see what further develops in the market before jumping into more 


   After rallying Wednesday, the lean hog contracts are really taking to moving 
bullishly as the market has seen strong interest in the cash market, midday 
pork cutout values are higher and it looks as though the day may be able to 
process more hogs as well. February lean hogs are up $0.85 at $82.45, April 
lean hogs are up $1.87 at $91.15 and June lean hogs are up $1.45 at $101.80. 
With the hog market eager to rally, any additional export support the market 
could get would only support the market further in its aspirations.

   The projected CME Lean Hog Index for 1/18/2022 is up $0.07 at $76.85 and the 
actual index for 1/17/2022 is up $0.88 at $76.78. On the National Direct 
Morning Hog Report 7,403 head of hogs have traded for a weighted average of 
$70.07, ranging from $60.00 to $74.00 and the five-day rolling average has now 
moved to $66.95. Pork cutouts total 230.98 loads with 207.16 loads of pork cuts 
and 23.83 loads of trim. Pork cutout values: up $6.29, $93.50.

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

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