GENERAL COMMENTS:
It was a big day of USDA reports with the
monthly Cattle on Feed (COF) and Cold Storage reports coming out. Cattle
contracts had a rough day, especially on the feeder cattle side of
things. Hog prices are $0.66 lower on the National Direct Afternoon Hog
Report, with a weighted average of $41.91. December corn is up 1/4 cent
per bushel and December soybean meal is down $2.00. The Dow Jones
Industrial Average is up 102.74 points and NASDAQ is up 12.76 points.
From Friday to Friday, livestock futures scored the following changes:
December live cattle down $0.42, February live
cattle down $1.12; January feeder cattle down $5.00, March feeder cattle
down $4.62; December lean hogs down $1.98, February lean hogs down
$4.35.
LIVE CATTLE:
Beef demand has been king this fall, and given
Friday's Cattle on Feed report with placement figures up 10%, cattlemen
ought to be thankful that demand has fueled this fall's market, because
if not a crisis would have been on the horizon. Friday's live cattle
market held its ground well considering that COF placement figures were
as lofty as they were, and the feeder cattle market was doors-wide open
to lower prices. December live cattle closed $0.65 lower at $118.67,
February live cattle closed $1.20 lower at $123.85 and April live cattle
closed $1.60 lower at $124.17. Cash cattle trade didn't end up doing
anything exciting Friday afternoon and was mostly clean up in its
nature. For the week, dressed cattle traded at $184, and live cattle
traded at $116.
The USDA Cold Storage report showed that total
red meat supplies in freezers were up 1% from the previous month but
down 1% from last year. Total pounds of beef in freezers were down 1%
from the previous month and down 10% from last year.
Closing boxed beef prices are lower: choice down
$2.29 ($232.57) and select down $2.54 ($211.32) with a total movement
of 104 loads (61.67 loads of choice, 14.74 loads of select, 14.34 loads
of trim and 13.46 loads of ground beef). Friday's slaughter is estimated
at 114,000 head, down 3,000 head from a week ago and down 1,000 head
from a year ago.
Thursday's slaughter was revised to 114,000 head, not 118,000 head.
MONDAY'S CASH CATTLE CALL: Steady to $1.00
lower. Seeing that cash cattle were able to secure higher prices this
week, it wouldn't be unlikely to see prices give a little next week with
the Thanksgiving holiday in the middle of the week. It would be a
longshot for cash cattle prices to rally on a holiday week knowing that
buyers would rather be kicking their feet up at home, smelling
Thanksgiving dinner roasting in the oven, instead of making last minute
cattle deals.
FEEDER CATTLE:
Feeder cattle markets had a tough day in nearby
and deferred contracts. The November contract expired Thursday, thus
opening Friday morning to the January board. January feeder cattle sold
$3.32 lower at $139.27, March feeders sold $3.20 lower at $139.60 and
April feeders traded $3.00 lower at $141.10. Friday's drop in prices
really hindered the progress made over the last couple of months as
feeder cattle prices gave up nearly half of the two-month rally.
On an estimated run of 2,891 head (up 1,218 head
from the previous week) Clarinda Livestock in Clarinda, Iowa sold light
steers, compared to last week, mostly steady to $7.00 higher. Light
heifers were mostly steady to $2.00 lower, 900 pound heifers were $2.00
higher. There was a heavy offering of good cattle which was met with
good demand. The CME Feeder cattle index 11/21/19: down $0.39 at
$145.47.
LEAN HOGS:
The later part of the week ended up treating
lean hog contract better than the beginning. December lean hogs closed
$0.57 higher at $61.22, February lean hogs closed $0.20 higher at $67.65
and April lean hogs closed $0.40 lower at $73.70. Pork cutouts totaled
324.61 loads with 290.69 loads of pork cuts and 33.92 loads of trim.
Pork cutout values: up $1.60 at $83.07. The CME lean hog index 11/20/19:
down $0.04 at $59.54. Friday's Cold Storage report shared that frozen
pork supplies were up 3% from the previous month and up 8% from last
year. Stocks of pork bellies were up 13% from last month and up 72% from
last year. For a long time, we have been bantering about how the lean
hog market is essentially crippled until export opportunities arise and
Friday's Cold Storage report solidifies those realities. It's hard to
even comprehend that pork bellies are up 72%.
MONDAY'S CASH HOG CALL: $1.00 lower. With next
week bringing the Thanksgiving holiday, buyers aren't going to want to
go out and bid the countryside, and with hogs easy enough to buy, demand
won't drive prices.
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