GENERAL COMMENTS
Cash cattle markets remained generally sluggish through Thursday with light trade reported in the South at $117 per cwt on a live basis. Light dressed trade slowly developed in the North at $186, with live trade of $117. There may be additional clean-up activity Friday. Asking prices on cattle left on show lists are at $118 and higher live and $189 and higher dressed. Trade is generally $3 to $4 per cwt lower than last week, but steady with trade seen over the last two days. According to the closing report, the national hog base is $0.35 lower compared with the prior day settlement ($53.00-$60.00) weighted average $58.47. The corn futures moved lower in light activity. March futures were 1 cent lower Thursday. The Dow Jones Index is 41 points higher with the Nasdaq up 34 points.
LIVE CATTLE
Live cattle futures closed in a moderately mixed trading range following overall lack of direction Thursday ($0.60 lower to $0.40 higher). Very little additional long-term direction developed through the trading session, although the potential to limit additional liquidation at the end of the week seemed to bring a sense of calm to the market. Nearby contracts still posted firm losses, which is putting significant pressure on the entire market. This may bring additional uncertainty to the complex over the near future. Beef cut-outs: lower, $0.28 lower (select, $183.83) and down $1.32 (choice, $205.08) with light demand and light to moderate offerings (75 loads of choice cuts, 26 loads of select cuts, 8 loads of trimmings, 9 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL:
Steady with early week trade. Additional trade developed through Thursday at $117 live and $186 per cwt dressed. Prices are generally steady with levels earlier in the week, and expected to have already set the tone for the week. Some clean-up trade is possible during the day Friday, but little to no market developments are expected before the end of the week.
FEEDER CATTLE:
Feeder cattle futures finally broke away from the trend of triple-digit losses seen through most of the week with mixed trade developed in late hours of trade ($0.75 lower to $0.45 higher). Early pressure in feeder cattle markets was extremely evident and set the tone for another bearish market shift. But, late-day buying slowly trickled into the market as gains developed in all nearby contracts. The lack of additional interest for liquidation at current price levels was a bigger factor than any renewed active buying interest. This could allow for additional stability through the end of the week. CME cash feeder index for 12/06 is $156.01 down $0.10.
LEAN HOGS:
Following early pressure redeveloping in lean hog trade, the market closed mixed in a moderate range ($0.57 lower to $0.12 higher). The higher prices that developed in the last couple hours of trade were associated more with lack of additional liquidation than any strong desire for traders to retake ownership. These moves still left the overall market weak as firm losses were seen in most nearby contracts where the majority of trades took place. This could allow for more stable market moves Friday as traders try to square positions at the end of the week. Carcass values bounced moderately higher as most primal cuts were able to slightly recover from the sharp losses seen Wednesday. Rib and belly cuts posted strong losses Thursday, but were unable to pull the entire complex lower. Pork cut-out: $83.18 up $0.43. CME cash lean index for 12/5 $64.85, up $0.50. DTN Projected lean index for 12/06 $65.30 up $0.45.
FRIDAY'S CASH HOG CALL:
Steady to $1 lower. Follow-through pressure is expected to be seen early Friday morning as packers try to take advantage of the most recent market tumble in futures trade. It is uncertain that packers are going to be able to significantly lower cash spending given the aggressive appetite for hogs in the procurement system. Friday's slaughter is expected at 462,000 head with an expected Saturday run at 223,000 head.
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