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DTN Midday Livestock Comments          01/21 11:21

   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.

Todd Hultman
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 
since mid-December.


   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

   Follow him on Twitter @ToddHultman1

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