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DTN Midday Livestock Comments          01/25 11:42

   Meat Prices Show Topping Signs 

   Both pork cutout and boxed beef prices have shown some weakness early 
Tuesday, which could signal that prices are topping. 

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

   Tuesday's market has shown a dip in both boxed beef and pork cutout prices. 
The market could grow stronger before the day's end, but it's not unlikely that 
prices are peaking. March corn is up 8 cents per bushel and March soybean meal 
is down $0.30. The Dow Jones Industrial Average is down 293.66 points and 
NASDAQ is down 367.24 points.

LIVE CATTLE:

   Historically speaking, the boxed beef market has rallied into the first two 
to three weeks of January as retailers restock their coolers. But as February 
approaches the market levels out. That's exactly what we are seeing in 
Tuesday's beef market. February live cattle are up $0.17 at $136.50, April live 
cattle are down $0.35 at $139.75 and June live cattle are down $0.22 at 
$135.35. The big concern is how much will boxed beef prices dip? Wanting the 
product to be more affordable for customers is a valid plea. But on the same 
token, if boxed beef prices dip too much, many packers may opt to run slow 
processing speeds, which would drastically hinder the market's ability to fully 
capture a spring rally. There's been a little bit of cash cattle trade in the 
South at $137, which is fully steady with last week's trad; but largely the 
market has yet to be tested and it is likely cash cattle wait to trade until 
Wednesday.  

   Asking prices are noted in the South at $138 and the North has yet to signal 
what they're hoping to get.

   Boxed beef prices are lower: choice down $0.16 ($293.34) and select down 
$0.14 ($284.65) with a movement of 84 loads (52.02 loads of choice, 8.50 loads 
of select, 7.31 loads of trim and 15.80 loads of ground beef).

FEEDER CATTLE:

   With the corn market trading comfortably in the $6.20 per bushel range, the 
feeder cattle complex is nauseous. If feeders were trading substantially 
higher, the market could stomach the cost of these higher inputs. But making 
cattle pencil in today's market takes a crafty mind and one who likes to look 
risk right in the eye. January feeders are down $0.07 at $158.40, March feeders 
are down $2.15 at $159.10 and April feeders are down $1.75 at $164.62.

LEAN HOGS:

   Even with the morning cash trade and morning pork cutout values showing some 
weakness, the lean hog futures are rallying into Tuesday afternoon. February 
lean hogs are up $0.87 at $87.20, April lean hogs are up $1.55 at $96.87 and 
June lean hogs are up $0.72 at $106.67. The market is still rallying on the 
excitement of what could come. With African swine fever plaguing numerous 
foreign countries, the U.S. market is crossing its fingers that export 
opportunities will only get more and more plentiful.

   The projected CME Lean Hog Index for 1/21/2022 is up $0.81 at $78.32 and the 
actual index for 1/20/2022 is up $0.72 at $77.51. Hog prices are lower on the 
National Direct Morning Hog Report, down $0.56 with a weighted average of 
$61.25, ranging from $60.00 to $75.00 on 2,650 head and a five-day rolling 
average of $64.82. Pork cutouts total 204.20 loads with 184.07 loads of pork 
cuts and 20.13 loads of trim. Pork cutout values: down $0.12, $95.54.

    

   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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