GENERAL COMMENTS:
With next week being one of the nation's biggest holidays, you can already start to feel the markets trading more mundane and looking forward to having next Thursday off. Hog prices on the National Direct Afternoon Hog Report are up $0.20 with a weighted average of $42.53. December corn is up 1 3/4 cents per bushel and December soybean meal is up $1.20. The Dow Jones Industrial Average is down 54.80 points and NASDAQ is down 20.52 points.
LIVE CATTLE:
Live cattle contracts closed Thursday slightly lower. December live cattle closed up $0.02 at $119.32, February live cattle closed down $0.42 at $125.05 and April live cattle closed down $0.47 at $125.77. Seeing that cash cattle prices were able to hold out and rally with Wednesday's $1.00 advancement gives bull-spreaders the warm/happy feeling that this week's Cattle on Feed (COF) Report may not be overly damaging. Cash cattle traded Thursday afternoon dressed for $184 and live for $116, and even some $117.50 in parts of Nebraska.
Released Thursday afternoon on the Monthly Livestock Slaughter Report, commercial red meat production for the United States totaled 5.06 billion pounds in October, up 3% from the 4.90 billion pounds produced in October 2018. Beef production came in at 2.44 billion pounds, just slightly above the previous year. Cattle slaughter totaled 2.98 million head, up 1% from October 2018. The average live weight was down 3 pounds from the previous year, at 1,360 pounds.
Closing boxed beef prices are lower: choice down $3.35 ($234.86) and select down $0.91 ($213.86) with a total movement of 127 loads (64.81 loads of choice, 16.09 loads of select, 36.55 loads of trim and 9.87 loads of ground beef). Thursday's slaughter is estimated at 118,000 head - steady with a week ago.
FRIDAY'S CASH CATTLE CALL: Steady. Seeing that the market has been able to rally cash cattle prices $1.00 to $2.00 higher this week with a bearish COF report coming out Friday is a success for feeders. Some cattle are still left to sell at $118 in Nebraska, which isn't impossible, but it would be a stretch.
FEEDER CATTLE:
Feeder cattle contracts suffered the greatest losses on Thursday. The market seems to be under pressure from both the board and countryside. The board's correction has been a long time coming and cattlemen were aware of its necessity. The fall feeder cattle run has held up considerably well, but the last week of prices being a tick lower here and there is simply due to sheer supply; weaned calves are a dime a dozen. November feeder cattle closed $1.07 lower at $145.52, January feeders closed $1.47 lower at $142.60 and March feeders closed $1.35 lower at $142.80.
Friday's Cattle on Feed Report is expected to tout lavish placement figures where analysts' projections vary a whopping 22%, ranging from 96.2% to 119.0%. Given that this year's fall wheat crop hasn't been fruitful, and stockers haven't been able to feeders out onto wheat fields, it makes sense that placement projections are so high. To go right along with that theory, we must also remember that this year's fall feeder cattle run didn't start off anxiously in September, but rather waited until October to fully understand where the market was after the anxiety surrounding the Holcomb Packing Plant Fire. Given the market's circumstances, it makes sense that the placement projections are so high.
On an estimated run of 13,984 head (up 5,880 head from the previous week) feeders at OKC West in El Reno, Oklahoma, compared to last week sold feeder steers sold $1.00 to $3.00 lower, feeder heifers sold mostly $2.00 to $4.00 lower. Long weaned calves sold with very good demand while softer unweaned calves traded with light demand. Demand was modest and quality average to attractive.
LEAN HOGS:
Able to secure solid gains after trading lower for nearly a week, lean hog contracts closed higher. December lean hogs closed up $0.20 at $60.65, February lean hogs close $0.67 higher at $67.45 and April lean hogs closed $1.17 higher at $74.10. Pork cutouts totaled 274.32 loads with 237.45 loads of pork cuts and 36.86 loads of trim. Pork cutout values: down $5.11 at $81.47. The CME lean hog index 11/19/19: up $0.29 at $59.58.
The Monthly Livestock Slaughter Report shared that pork production totaled 2.61 billion pounds, up 6% from the previous year. Hog slaughter totaled 12.3 million head, up 6% from October 2018. The average live weight was up 2 pounds from the previous year, at 285 pounds.
FRIDAY'S CASH HOG CALL: Steady to $1.00 higher. Given that there is still time for packers to push out product for Thanksgiving dinner, making a strong kill the next couple of days may incentivize packers to pay a touch more.
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