Livestock traders seemed to stand on the sidelines Monday while outside markets negotiated an economically bullish outlook for successful vaccination against COVID-19 (someday). Futures prices were mixed throughout the day, mostly consolidating within last week's trading ranges, except in some deferred lean hog contracts which pursued fresh autumn lows. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.45, with a weighted average of $59.27 on 4,612 head. December corn closed up 5 3/4 cents per bushel and December soybean meal closed up $1.20 per ton. The Dow Jones Industrial Average is up 470.63 points and NASDAQ is up 75.54 points.
LIVE CATTLE:
After failing to overcome resistance at $112.70 last week, the front-month live cattle futures contract seems to be lingering back in familiar territory, closing Monday up $0.50 at $110.425. The February contract closed down $0.20 at $112.025 and the April contract closed up $0.15 at $116.35. After last week's impressive jump in cash cattle prices (mostly $172 dressed in the North and mostly $110 live in the South), new showlists this week are kicking off the action somewhat lower in Texas and lower in Kansas and Nebraska/Colorado. An upcoming Cattle on Feed report this Friday is expected to show a bearish increase over last year's 11.8 million head on feed Nov. 1, with the increase pegged anywhere between 0.9% and 2.6%, according to analysts polled by Dow Jones Newswires. Monday's slaughter was seen at 119,000 head -- 2,000 more than last week and even with a year ago.
Boxed beef prices were higher: choice up $0.97 ($226.95) and select up $2.89 ($212.35).
TUESDAY'S CASH CATTLE CALL: Steady. Significant trading volume isn't likely to be seen until Wednesday or later.
FEEDER CATTLE:
The fall feeder cattle market has put on quite a show -- the November contract rocketed $14 per hundredweight between Oct. 20 and Nov. 10, but the show may now be having an intermission. Friday's futures profit-taking and subsequent price drop carried over into a little more correction on Monday, with the November chart down $0.20 to $137.275. Deferred contracts fared a little better: January up $0.05 at $137.925 and March up $0.525 at $137.675. Buyers at sale barns this week will have higher feed costs at the back of their minds, with the nearby corn futures price floating within 12 cents of its recent $4.28 high. The CME feeder cattle index for Nov. 12: up $0.65, $137.35.
LEAN HOGS:
The most consistent price movement Monday in the livestock futures markets was seen in the early 2021 lean hog contracts, which pursued a lower direction throughout the session. Low trading volumes allowed for some fluctuations in the nearby contract, which closed $0.25 higher at $65.15, but the predominantly bearish tone was clearer in the February contract, down $0.80 at $63.775, and the April contract, down $0.575 at $67.45. Despite increased coronavirus costs at processing facilities (PPE, sanitation, testing), Tyson Foods announced very positive fourth quarter results, with rising sales volumes for pork and beef, and overall earnings that beat traders' expectations. It's easy to see how that happens on days like Monday, when hog prices slip but cutout values stay pricey. Pork cutouts total 346.67 loads with 309.03 loads of pork cuts and 37.64 loads of trim. Pork cutout values: up $1.01, $81.15. Monday's slaughter was seen at 491,000 head -- 2,000 less than both a week ago and a year ago. The CME lean hog index for Nov. 12: down $0.48 at $70.84. The DTN projected CME lean hog index for Nov. 13: down $0.76 at $70.08.
TUESDAY'S CASH HOG CALL: Steady to slightly lower. Heavy availability of animals and the trending erosion in weighted average prices may carry over from last week into this.
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