GENERAL COMMENTS:
In a time where trade agreements are all but on the table, we need to keep in mind where the market is in regard to season trends and behavior. If next week is depressed, it doesn't mean the world is ending, December isn't typically time for the market to rally. March corn is up 3 1/4 cents per bushel and January soybean meal is up $2.70. The Dow Jones Industrial Average is up 3.33 points and NASDAQ is up 17.56 points.
From Friday to Friday, livestock futures scored the following changes: December live cattle up $2.18, February live cattle up $2.58; January feeder cattle up $4.13, March feeder cattle up $4.57; December lean hogs down $0.65, February lean hogs up $1.95.
LIVE CATTLE:
Cattle contracts were able to keep their gains through closing and kick the positive energy over to the cash market. December live cattle closed $1.95 higher at $122.37, February live cattle closed $2.45 higher at $127.55 and April live cattle closed $2.00 higher at $128.20. After the clock struck noon, cash cattle trade started warming up and fat cattle in the north traded $2.00 higher than last week's weighted average in Nebraska for $188 t0 $190, but mostly for $190.
Friday's close on the board drove the live cattle market the highest its been since late April. Are these gains sustainable or did the market over react to overly-bullish news about the phase one trade agreement? Like many, cattlemen's hearts always whisper bullish encouragement. That's what makes cattlemen the tenacious souls that they are, but true seasoned cattlemen know that they must rival those bullish thoughts from the most depressed and damaging "there-is-no-tomorrow" bear. So when you lay the facts out, first of all, cash cattle trade was expected to be higher this week -- that wasn't unexpected. Secondly, in regard to the phase one agreement, things look optimistic, and nearly every credible source foresees this agreement happening and taking place. But going back to those bearish whisper, the agreement isn't signed until it's signed. There's no denying that Friday's rally was sparked by the news, but based on the entire cattle complex and entire cattle industry, the cattle market is ready for more.
Box beef values close higher: choice up $0.64 ($216.29) and select up $1.68 ($204.24) with a total movement of 127 loads (49.86 loads of choice cuts, 14.36 loads of select, 19.44 loads of trim and 43.18 loads of ground beef). Friday's slaughter is estimated at 122,000 head, 1,000 head more than a week and year ago. Saturday's slaughter is projected to be at 54,000 head, which is 27,000 head less than a week ago and 3,000 head more than year ago.
MONDAY'S CASH CATTLE CALL: Steady. Knowing that it's the week before Christmas and that packers were able to buy cattle with time this week, it's safe to assume that next week will trickle in some business, but the market rally before the end of the year most likely took place.
FEEDER CATTLE:
As did live cattle contracts, feeder cattle contracts took Friday with steam and closed significantly higher. January feeder cattle closed $3.12 higher at $145.67, March feeder cattle closed $2.80 higher at $146.25 and April feeder cattle closed $2.47 higher at $148.05.
On an estimated run of 5,851 head in Ogallala, Nebraska, at the Ogallala Livestock Auction, compared to last week steers and heifers were $6.00 to $8.00 lower, except 500 to 600 pound steers, which were $2.00 to $10.00 higher. The CME feeder cattle index 12/12/19: is not available at this time.
LEAN HOGS:
Anxiously wanting to know if President Trump will get china to commit to buying $40 to $50 billion in agriculture products, pork producer's take Friday's bullish news as a breath of fresh air and pray that the deal comes through sooner rather than later. December lean hogs closed $0.52 lower at $60.47, February lean hogs closed $0.85 higher at $69.50 and April lean hogs closed $1.60 higher at $76.22.
Pork cutouts totaled 331.73 loads with 286.90 loads of pork cuts and 44.84 loads of trim. Pork cutout values: up $0.22 at $81.88. Friday's slaughter is estimated at 492,000 head. 4,000 head more than last week and 15,000 head more than a year ago. Saturday's slaughter is projected to be 308,000 head, which is 21,000 head less than last week but 79,000 head more than a year ago. The CME lean hog index 12/11/19: $59.72, up $0.26.
MONDAY CASH HOG CALL: Steady. The market took a significant jump Friday. Other indicators are going to need to present themselves for much more to shake out. And given that next week is only the week before Christmas, it may not be until after the first of the year until things come to fruition again.
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