Thursday Midday Livestock Market Summary - Mixed Support Trickles into the Contracts Before New Year

General Comments

It's been a wild week for the cattle contracts as support was ample early in the week and then with the corn market's surge the feeder cattle contracts have seemed to fall out of bed. Meanwhile the lean hog market is accepting any support the marketplace cares to share and thankfully is seeing some continued support throughout the pork cutout values. March corn is up 9 cents per bushel and March soybean meal is up $0.50. The Dow Jones Industrial Average is down 10.68 points and NASDAQ is down 25.46 points.

LIVE CATTLE

The live cattle contracts have been met with renewed support following Tuesday and Wednesday's lower closes. February live cattle are down $0.02 at $114.42, April live cattle are up $0.07 at $118.67 and June live cattle are up $0.22 at $114.10. Heading into the New Year's holiday, boxed beef prices are lower but that isn't expected to continue once the calendar turns to the New Year. The cash cattle market has been very quiet without any bids renewed following Wednesday's stronger trade. Cattle in the South traded live for $111, which is $1.00 higher than a week ago; and Northern dressed cattle sold anywhere from $175 to $176, which is $2.00 to $4.00 stronger than last week's trade.

Beef net sales of 14,900 mt reported for 2020 were up noticeably from the previous week and up 82% from the prior four-week average. Increases were primarily for Japan (3,900 mt, including decreases of 1,100 mt), China (3,100 mt, including decreases of 300 mt) and South Korea (2,900 mt, including decreases of 200 mt).

Boxed beef prices are lower: choice down $1.28 ($209.25) and select down $2.99 ($196.87) with a movement of 113 loads (72.32 loads of choice, 25.37 loads of select, 4.58 loads of trim and 10.26 loads of ground beef).

FEEDER CATTLE

As the corn market continues to climb to highs not seen in the last six years, the feeder cattle market is letting Thursday's trade slide lower not wanting to have to face another battle in 2020. January feeders are down $0.17 at $138.35, March feeders are down $0.20 at $139.55 and April feeders are down $0.55 at $141.10. Next week the feeder cattle complex should be more active as traders step back into the market excited to have a normal week of trade, and thankfully some larger feeder cattle sales will be debuted which are expected to be met with strong demand.

LEAN HOGS

With the arrival of 2021 being a mere few hours away, the spot February contract is rally over $2.00 stronger as the pork market is ready for an upbeat turn of any measure. February lean hogs are up $2.40 at $70.02, April lean hogs are up $1.32 at $72.40 and June lean hogs are up $0.90 at $82.85.

Pork net sales of 7,700 mt reported for 2020 were down 53% from the previous week and 73 percent from the prior 4-week average. Increases primarily for Mexico (10,300 mt, including decreases of 900 mt), El Salvador (1,700 mt) and China (1,600 mt, including decreases of 4,000 mt).

The projected lean hog index for 12/30/2020 is up $0.21 at $60.07 and the actual index for 12/29/2020 is down $0.07 at $59.86. Hog prices are higher on the National Direct Morning Hog Report, up $2.17 with a weighted average of $51.28, ranging from $47.75 to $53.47 on 4,903 head and a five-day rolling average of $49.81. Pork cutouts values total 133.00 loads with 103.98 loads of pork cuts and 29.02 loads of trim. Pork cutout values: up $8.70, $81.35.

Thursday Morning Livestock Market Update - Expected Quiet End to an Unbelievably Challenging Year

General Comments:

Light cash cattle trade started to develop Wednesday with live cattle trade in the South selling for $111 per cwt. This is generally $1 per cwt higher than last week and will help support the underlying end-of-year support moving into the market as feeders focus on increased need for packers to gain steady and increasing market-ready cattle through the month of January. Dressed cattle futures posted a $2 to $4 per cwt gain from last week's average with prices Wednesday at $175 to $176 per cwt. It is likely that the tone for the market has been set, although the potential for additional light clean-up trade exists through the New Year's Eve. It is still hard to define just how many cattle sold as much of the trade developed following the cutoff time for Mandatory reporting. The ability to drive additional, but light price support into cash markets following the pressure in futures trade is creating some expectations that further market support will develop over the next couple of weeks. Feeder cattle futures remain weak heading into the last trading day of 2020. The renewed buyer support in corn trade and seemingly unstoppable price gains in the market will have significant short- and long-term impacts for the entire livestock complex. Triple-digit losses over the last two days in nearby feeder cattle futures have started to factor in the higher feed prices, but the impact of the aggressive corn market moves are not expected to be fully worked through the cattle complex. This could lead to additional market softness in the coming days. The question is whether selling pressure will be seen before the end of the year or hold off until January. Trade volume is likely to remain limited Thursday as traders square end-of-year positions, although overall trader attendance remains limited given the upcoming holiday. Live cattle futures are expected to remain mixed in limited trade volume. The firming cash and boxed beef values seen midweek will spark underlying support, although the limited interest and previous market weakness has the potential to limit buyer interest as markets coast into 2021. Boxed beef prices firmed in both choice and select markets, although the limited gains in choice cuts was quickly overshadowed by aggressive triple-digit gains in select prices. Select beef cuts rallied $4.38 per cwt, quickly narrowing the market spread between the two segments. Although trade volume remains light, the overall tone of the beef market is firming going into the end of the year. This is creating hopes and limited expectations that additional support may develop early next week when active trade interest returns to the market.

Mixed trade in lean hog futures Wednesday continues to point to the ability for hog futures to trade near the top end of the trading range. The higher close in spot February lean hog futures is testing short-term resistance levels of $67.85 per cwt seen last week. A move above these price levels at the end of the year would place the market at six-week highs and help to solidify follow-through technical buyer support early next year. Limited interest and trade volume are expected Thursday with most traders likely to already have needed positions placed as they prepare for the long holiday weekend. Although markets will remain open the entire session, typically on New Year's Eve, it just as well could be an early close, or even a closed market day due to the limited activity and narrow market shifts seen on the last day of the year. Pork cutout values trickled higher Wednesday afternoon, posting a $0.29 cent per cwt gain. This underlying support in the market comes as pork values transition from holiday demand cuts, back to a more normal price relationship with pork cuts based on general consumer demand. Traders will also be closely focusing on the weekly Export Sales report Thursday morning, which will help to indicate activity, especially from China during Christmas week, and give a better indication as to buying interest through the end of the year. Cash hog bids are expected $1 lower to $1 per cwt higher with most bids expected steady to 50 cents lower. Thursday slaughter numbers are expected near 395,000 head. Saturday runs are expected near 328,000 head.

	BULL SIDE		BEAR SIDE
1)	Cash cattle prices were able to command moderate-to-firm price support despite the sharp pressure in futures trade during the week. Cash prices gained $1 to $4 per cwt depending on location, cut the focus on ending 2020 with increased prices brings a bright spot to a challenging year.	1)	The continued aggressive gains in corn and grain markets is keeping cattle markets cautious. The higher feed prices will continue to have a major impact on feeder profitability and production levels through early 2021.
2)	Moderate-to-strong gains in boxed beef values were symbolized by select cuts gaining $4.38 per cwt in midweek trade. The ability to continue beef market strength into the new year is likely to spark renewed support across the entire beef complex.	2)	The ability to sustain current momentum in beef cutout markets and continue active beef movement following the holidays will be a significant factor in keeping cattle prices within the top end of the recent trading range.
3)	Nearby lean hog futures continue to trade at or near short-term resistance levels, focusing on strong underlying support developing across the complex.	3)	Pork cutout values continue to show late year support even though holiday pork buying has wrapped up. The uncertainty of how quickly pork product movements will be seen, could limit further gains during early January.
4)	In the last weekly Export Sales report of the year, traders are looking for moderate-to-strong buyer support of pork from normal trade partners. The focus will be primarily on China's end-of-the-year interest in the market, potentially helping to springboard into a positive market move in early 2021.	4)	Sharp cash hog losses developed Wednesday. The combination of large market-ready hog numbers available to packers and the upcoming holiday weekend with limited plant activity is likely to add to end of the year cash hog weakness.

Wednesday Closing Livestock Market Update - Cash Cattle Market Jumps Despite Lower Cattle Futures

 GENERAL COMMENTS:

The livestock contracts once again closed mixed as cattle contracts waned lower and the lean hog contracts fought to keep any support that was available. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.03 with a weighted average of $49.01 on 11,134 head. March corn is up 8 1/2 cents per bushel and March soybean meal is up $3.50. The Dow Jones Industrial Average is up 73.89 points and NASDAQ is up 19.78 points.

LIVE CATTLE:

The futures market may be trading mostly lower throughout the live cattle contracts, but feedlots know what they are sitting on. Frankly, feedlots see the market's beef demand growing and they aren't willing to settle for less when more can be attained this week! February live cattle closed $0.12 lower at $114.45, April live cattle closed $0.17 lower at $118.60 and June live cattle closed $0.40 lower at $113.87. Some light trade developed Wednesday afternoon for fully higher prices as feedlots were relentless and demanded their full asking prices. Trade in Texas was marked at $111, which is $1.00 higher than a week ago. Some trade in Nebraska and Iowa surfaced live at $112, which is $4.00 higher than a week ago, and a few dressed deals were reported in Nebraska for $176, which is $4.00 higher as well. For cattle that are left to sell, asking prices are firm at $112 to $114 in the South and $178 to $180-plus in the North. Wednesday's slaughter is estimated at 117,000 head, 4,000 head more than a week ago and incomparable to a year ago.

The Fed Cattle Exchange Auction listed a total of 1,015 head, of which 194 actually sold and 821 head were listed as unsold. The state-by-state breakdown looks like this: Texas 951 total head, with 194 head sold at $111.00 and 757 head unsold; Nebraska 64 total head, none of which sold.

Boxed beef prices closed higher: choice up $0.23 ($210.53) and select up $4.38 ($199.86) with a movement of 141 loads (80.64 loads of choice, 21.20 loads of select, 15.70 loads of trim and 23.27 loads of ground beef).

THURSDAY'S CASH CATTLE CALL: Steady to slightly higher. With how strong the cash cattle market is trading, Thursday's trade will at least be steady if not slightly stronger, as feedlots know what their cattle are worth and packers don't want to go into the new year short-bought.

FEEDER CATTLE:

The feeder cattle contracts veered lower throughout Wednesday's trade as the corn market scales to price levels not seen since 2014. January feeders closed $1.10 lower at $138.52, March feeders closed $1.47 lower at $139.75 and April feeders closed $1.32 lower at $141.65. Until after the first of the year when the market can level out from the oddities that the holidays can bring, anxious trade is expected. At Sioux Falls Regional Livestock Auction in Worthing, South Dakota, compared to two weeks ago on a light test, steers sold $5.00 to $6.00 higher and heifers sold steady with a slightly higher undertone. The market's demand was excellent for the limited offering available. The snowstorm that blew in Tuesday made it difficult for producers to travel and consequently led to a smaller sale. The market was extremely active, and packers were willing to push the market higher. Slaughter cows were $2.00 higher and bulls sold with higher undertones. The CME feeder cattle index for Dec. 29: up $0.31, $138.71.

LEAN HOGS:

While the cattle contracts traded lower, the lean hog market worked to keep its upward momentum and was able to do so through Wednesday's close. Some nearby contracts faced slight pressure, but largely the market kept its foothold and the day's higher cutout close has helped keep the positive attitude alive. February live cattle closed $0.40 higher at $67.60, April lean hogs closed steady at $71.07 and June lean hogs closed $0.05 lower at $81.95. Pork cutouts totaled 343.24 loads with 288.86 loads of pork cuts and 54.38 loads of trim. Pork cutout values: up $0.29, $72.65. Wednesday's slaughter is estimated at 472,000 head, 41,000 head more than a week ago and incomparable to a year ago. Tuesday's hog slaughter was revised to 451,000 head. The CME lean hog index for Dec. 28: down $0.67, $59.93.

THURSDAY'S CASH HOG CALL: Lower. Seeing that packers have lessened their aggression in processing heading into the New Year's Day, its unlikely that they will be aggressive in buying come Thursday.

Wednesday Midday Livestock Market Summary - Cattle Contracts Are Unsure of the Day While Hogs Rally Modestly

General Comments

The cattle contracts continue to trade in a doggish fashion while the lean hog contracts trade modestly higher. Following the strong trade that the cattle contracts saw earlier in the week, traders have grown distant from the live cattle and feeder cattle contracts are most likely are waiting until after the first of the year to see where the markets true direction lays. March corn is up 1 cent per bushel and March soybean meal is up $0.40. The Dow Jones Industrial Average is up 157.31 points and NASDAQ is up 43.56 points.

LIVE CATTLE

Feedlots couldn't care less what the boards doing Wednesday morning as they are determined to get more money for their cattle this week or to carry them over into 2021. The live cattle contracts have traded back and forth throughout Wednesday's early trade but have recently seen some minor support build in nearby contracts, which is most likely stemming from stronger boxed beef prices and the gusto behind the cash market. February live cattle are up $0.15 at $114.72, April live cattle are up $0.05 at $118.82 and June live cattle are down $0.12 at $114.15. The countryside is still mostly quiet with just a few bids seen hitting the table. Live cattle in the North are bid at $110, and dressed cattle are bid anywhere from $172 to $176. Packers are expected to improve their bids as the day trails on and trade is expected to develop before the day's close. Asking prices are around $112 to $114 in the South and $180-plus in the North.

The Fed Cattle Exchange Auction listed a total of 1,015 head, of which 194 actually sold, 821 head were listed as unsold. The state by state breakdown looks like this: TX 951 total head, with 194 head sold at $111.00, 757 head went unsold; NE 64 total head, none of which sold.

Boxed beef prices are higher: choice up $0.56 ($210.86) and select up $4.18 ($199.96) with a movement of 81 loads (43.80 loads of choice, 12.36 loads of select, 7.58 loads of trim and 17.30 loads of ground beef).

FEEDER CATTLE

The feeder cattle market isn't feeling any more optimistic than how the complex was before closing lower Tuesday afternoon. January feeders are down $0.70 at $138.92, March feeders are down $0.82 at $140.42 and April feeders are down $0.82 at 142.15. The market sits in a peculiar place between the Christmas and New Year holiday as the market's interest varies and only has a limited volume. The pressure from rising feed costs continue to worry feedlots but once the market turns to 2021 and regains some normalcy following the holiday jitters, it will become more apparent how real the corn market's price levels are.

LEAN HOGS

As the day nears closer and closer to the noon hour, there's some light regression building in the nearby lean hog contracts, but the deferred contracts are keeping their modest gains still. February lean hogs are up $0.30 at $67.50, April lean hogs are down $0.10 at $70.97 and June lean hogs are down $0.05 at $81.95. Even though the market isn't seeing followed through support from the cash hog market, this week's steady increase through pork cutout values is promising.

The projected lean hog index for 12/29/2020 is down $0.07 at $59.86 and the actual index for 12/28/2020 is down $0.67 at $59.93. Hog prices are lower on the National Direct Morning Hog Report, down $1.64 with a weighted average of $48.40, ranging from $44.00 to $50.00 on 6,944 head and a five-day rolling average of $49.50. Pork cutouts total 196.44 loads with 157.40 loads of pork cuts and 39.04 loads of trim. Pork cutout values: up $0.45, $72.81.

Wednesday Morning Livestock Market Update - Grain Market Rally Disrupts Cattle Market Optimism

 General Comments:

Cash cattle activity remains quiet as the sharp turn lower in futures trade seems to have had little immediate impact in the price potential in the cash market. But the higher feed prices and continued weakness in futures trade could have longer lasting implications in the ability for feeders to command the higher prices they are looking for during the holiday week. Bids are hard to pin down in the North, while Southern live cattle bids remain at $112 and higher. The expectation that packers will be aggressive buyers in order to fill plant needs for the first two weeks of January is causing the bullish undertone by feeders. The question of just how many negotiated cattle will be needed during early January still is not being answered with contracted cattle able to be utilized to curb overall needed cattle bought out of the cash cattle market. Even with the sharp shift lower in cattle futures Tuesday, the focus across the market is being placed on end-of-year needs with boxed beef prices stabilizing and expected to gain light-to-moderate momentum over the next couple of weeks. Cash trade is likely to become more active Wednesday. Although both sides desire to wrap things up before New Year's Eve, there is not nearly the same intensity of finishing Wednesday as seen last week. This could allow some trade to trickle into Thursday afternoon, but depending also on the direction of futures trade over the next couple of days.

As it has been said time and time again over the last couple of weeks, limited volume during holiday weeks can and most likely do create significant disruptions to the market. This continues to be the case as limited trade volume is seen in all markets, creating uncharacteristic market moves as prices break away from technical or fundamental market indicators, and few traders in the complex can have a significant impact on market prices and price direction. This continues to be the case time and time again during major holiday weeks, and Tuesday's cattle and grain market shifts evidenced this. The main focus in cattle trade Tuesday was placed on the surge in grain prices, with nearby corn prices rallying nearly 10 cents per bushel, and soybean markets posted gains of 38 cents per bushel. This increased cost of production quickly and aggressively impacted feeder cattle futures, and swiftly moved through the live cattle complex. The underlying pressure is showing the most impact in nearby live cattle futures. Even though grain markets appear to be giving some of the early week gains back Wednesday morning, the damage seems to be done in the livestock market for now. With limited trade volume over the next couple of days, prices could remain volatile, but the pattern of these moves is still uncertain as markets are not reacting in a rational manner due to limited trade and wild outside market shifts. Boxed beef prices remained mixed Tuesday, but the underlying support in choice markets seem to indicate further buyer support across the complex. This is likely to limit longer-term concerns surrounding beef price stability, although growing questions remain about just how aggressive demand support will develop in early January with concerns about food service demand through the upcoming weeks after the holiday has passed.

Strong underlying support continues to move into nearby lean hog futures as the market seemed to be less impacted by the grain market as cattle futures were. Although when it comes to production cost shifts, the impact of soybean market gains on the hog market has just as much or more feed market impact than the corn complex, although both are very significant. The expectation of firming demand support in domestic and export markets over the coming weeks is helping to drive additional buyer support into the market, as prices are still hovering in the top one-third of short-term trading ranges as prices continue to remain comfortable between the $67 and $72 per cwt price ranges. Limited but positive support in pork cutout values has led to increased underlying support. As wholesale buyers and retailers move away from the holiday demand products, and back into typical pork mainstays like ribs, loins and belly cuts, the focus is on building significant retail support around these products as consumers move back to a more normal pattern of shopping and cooking after the holidays. There is also the expectation that moderate-to-strong export demand will redevelop over the next couple of weeks, bolstering overall pork demand and price levels. Cash hog bids are expected $1 lower to $1 per cwt higher with most bids expected steady to 50 cents lower. Wednesday slaughter numbers are expected near 488,000 head. Saturday runs are expected near 328,000 head.

	BULL SIDE		BEAR SIDE
1)	Cash market optimism remains strong in cattle markets following the Christmas week gains and need for packers to gain access to additional cattle through early January. This is creating significantly higher asking prices with feeders not likely to settle for steady money going into 2021.	1)	Sharp gains in corn and soybean markets quickly disrupted the positive movement in cattle trade Tuesday. Feeder cattle futures carried the brunt of the higher feed costs, but this price pressure was quickly passed on through live cattle futures. Higher feed prices through the upcoming year is likely to be a major concern in cattle market profitability and likely to limit price support.
2)	Despite the price pressure Tuesday, nearby live cattle futures continue near long-term highs, with the potential to move above these resistance levels likely sparking underlying technical buyer support.	2)	Continued pressure in food service demand is likely to remain a major issue during early 2021. With holiday activities wrapping up, the concern of consumers cutting back on spending and dietary changes due to New Year's resolutions, typically has an impact on consumer spending and will likely impact beef demand also.
3)	Lean hog futures posted strong late day support despite the aggressive gains in grain markets, which disrupted positive movement in the cattle complex. Although hog markets remain heavily impacted by feed prices also, the increases have been able to be worked through nearby lean hog prices.	3)	Uncertainty of movement of pork in export markets during the Christmas week may add late week concern to the complex as traders look forward to the weekly Export Sales report Thursday morning.
4)	Firm underlying support is starting to redevelop in pork cutout values. The focus on increased buyer support and strong consumer demand through the holiday season is pointing to further upward movement during early January.	4)	Limited trade volume during the holiday week may quickly disrupt the firm buyer support in the complex over the last two days. With markets closed Friday, trade is expected to remain sluggish, leaving prices vulnerable to wide market swings, which are not supported by fundamental or technical market factors.

Tuesday Closing Livestock Market Update - Cattle Contracts Sink Lower Fearing Corn Prices

 GENERAL COMMENTS:

Tuesday ended up being a mixed day for the livestock sector as cattle contracts veered lower, but the lean hog market successfully closed higher. Wednesday is going to be an important day for this week's cash cattle market, and by the looks of it a higher market is in play. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.24 with a weighted average of $50.06 on 10,050 head. March corn is up 9 1/2 cents per bushel and March soybean meal is up $11.60. The Dow Jones Industrial Average is down 68.30 points and NASDAQ is down 49.20 points.

LIVE CATTLE:

The live cattle contracts ran out of steam as the corn market rallied significantly higher. February live cattle closed $1.20 lower at $114.57, April live cattle closed $0.75 lower at $118.77 and June live cattle closed $0.52 lower at $114.27. Thankfully the board's minor setback hasn't rocked feedlots' confidence this week as they are still gunning for higher prices in the cash cattle market. Tuesday was a relatively quiet day on the cash cattle front as the snow blowing across Nebraska and Iowa by no means pushed buyers into feeling pressured to sell. There was some light trade in the North at $110, and some bids surfaced for dressed cattle in Iowa at $173, neither of which drew enough attention to call a trend for the week. Meanwhile the South continues to sit tight with asking prices of $112 plus. Trade is expected to develop sometime Wednesday mid-morning.

Tuesday's slaughter is estimated at 116,000 head, 3,000 head less than a week ago and 15,000 head more than a year ago.

Boxed beef prices closed mixed: choice up $2.48 ($210.30) and select down $1.17 ($195.48) with a movement of 144 loads (92.44 loads of choice, 18.12 loads of select, 11.06 loads of trim and 22.23 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: Higher. Feedlots are bound and determined to get this week's cash cattle market higher and don't plan to weaken. Seeing an advancement this week of $2.00 to $3.00 strong isn't by any means out of the question.

FEEDER CATTLE:

Tuesday ended up being a lost cause for the feeder cattle contracts as feedlots watched the corn market jump $0.09 higher in nearby contracts and close comfortably above $4.60 per bushel in the March 2021, May 2021 and July 2021 contracts. Input costs are one of the fastest ways to suck profitably out of an operation and with Tuesday's higher corn close feedlots are on edge. January feeders closed $1.37 lower at $139.62, March feeders closed $1.37 lower at $141.22 and April feeders closed $1.15 lower at $142.97. The CME feeder cattle index Dec. 28: up $0.11, $138.40.

LEAN HOGS:

The lean hog market had a successful day as the market saw full support across the marketplace with the futures market closing fully higher, cash prices closed higher and even pork cutout values managed to close higher before Tuesday's end. February lean hogs closed $0.70 stronger at $67.20, April lean hogs closed $0.32 higher at $71.07 and June lean hogs closed $0.12 higher at $82.00. The interest in the cash market has been strong this week as packers have bought upwards of 10,000 head both days. Heading into 2021, the hog market hopes to keep this upward momentum and shake the 2020 blues. Pork cutouts totaled 355.17 loads with 314.14 loads of pork cuts and 41.03 loads of trim. Pork cutout values: up $0.51, $72.36. Tuesday's slaughter is estimated at 465,000 head, 8,000 head less than a week ago and 57,000 head more than a year ago. The CME lean hog index for Dec. 23: down $1.02, $60.60.

WEDNESDAY'S CASH HOG CALL: Steady. Seeing that packers have been buying more hogs in the cash market, Wednesday could be another day of a stronger close as packers want to get hogs bought before being back to normal schedule in 2021.

Tuesday Midday Livestock Market Summary - Cattle Face a Minor Pull Back While Hogs Strengthen

 General Comments

It's been a back and forth day for the livestock contracts as the market would love to continue rallying but traders are growing a little skeptical of how much higher they should support the market before the New Year. The cash cattle market is still quiet with the marketplace idle without any bids. March corn is up 9 3/4 cents per bushel and March soybean meal is up $7.40. The Dow Jones Industrial Average is down 44.27 points and NASDAQ is down 55.41 points.

LIVE CATTLE

As heavy snow fall accumulates in parts of Nebraska and Iowa the live cattle market scales lower. February live cattle are down $0.32 at $115.45, April live cattle are steady at $119.52 and June live cattle are down $0.02 at $114.77. Monday's advancement moved the market to long-term resistance levels and leaves the market teetering on whether higher trade should be boldly sought, but also leaves the market wondering if now isn't quiet the time. Whether the market decides to climb higher or not this week with New Year's holiday quickly approaching, the market will be faced with the same question once again in 2021 as the market's fundamentals continue to strengthen. The cash cattle market is still mostly quiet with asking prices in the South at $112 to $113 and dressed cattle in the North priced at $180-plus. There's been some cattle bid on in Nebraska for $110, but feedlots thus far aren't accepting.

Boxed beef prices are mixed: choice up $2.23 ($210.05) and select down $1.47 ($195.18) with a movement of 60 loads (37.60 loads of choice, 11.30 loads of select, zero loads of trim and 11.45 loads of ground beef).

FEEDER CATTLE

As Tuesday moves closer and closer to the noon hour, the feeder cattle contracts keep scaling lower feeling pressure especially in the nearby contracts as well as from the storm moving across Nebraska and Iowa. January feeders are down $1.07 at $139.92, March feeders are down $1.22 at $141.37 and April feeders are down $1.07 at $143.05. Thankfully the countryside is still relatively quiet for sales this week though there are some specialty sales offered before the first of the year. For the most part cow-calf producers are waiting until after the first of the New Year to market their calves so thankfully the snow should be past as that point. Even though most of the country has been blessed with good weather late this fall and early into this winter, temperature swings are incredibly tough on calves and can be especially strenuous for those new feeders in feedlot.

LEAN HOGS

While the cattle contracts are facing a slight pull-back from traders the lean hog contracts are finding more support as the day progresses onward. February lean hogs are up $0.80 at $67.30, April lean hogs are up $0.17 at $70.92 and June lean hogs are down $0.10 at $81.77. It helps that the market is seeing dual support not only from the futures market but also from the cash hog market and pork cutout values. The market could stand to trade slightly higher if fundamental support continues to shine through.

The projected lean hog index for 12/28/2020 is down $0.67 at $59.92, and the actual index for 12/23/2020 is down $1.02 at $60.60. Hog prices are higher on the National Direct Morning Hog Report, up $0.19 with a weighted average of $50.01, ranging from $44.00 to $51.50 on 7,150 head. Pork cutouts total 206.33 loads with 179.92 loads of pork cuts and 26.41 loads of trim. Pork cutout values: up $1.56, $73.41.

Tuesday Morning Livestock Market Update - Cattle Market Strength Pointing to Additional Late Year Gains

 General Comments:

Cash cattle trade during the New Year's holiday week is always interesting. Although, like Christmas week, it is a holiday-shortened week, with packers and feeders trying to cram a full week of activity into three or four days. But unlike Christmas week, the need for packers to secure needed procurement numbers for active and full week runs over the next two to three weeks will cause both sides to become more active and make the most of the shortened timeline this week. The momentum that cash cattle markets have going into the week should help to command higher price levels, but the biggest question now is just how much higher prices. Renewed support continues following cash cattle prices that jumped an average of $3 per cwt last week, while continued futures market support is developing through the end of the year. Cattle are starting to be priced higher with $180 per cwt asking prices seen in the North, although asking prices in the South are still hard to pin down. Even though packer interest may become slightly more aggressive during the day Tuesday, it is likely that trade will be delayed until Wednesday or Thursday. Live cattle futures continue to gain strong late year support with nearby contracts moving to six-week highs through the end of the session Monday. The ability for February live cattle futures to post moderate-to-strong gains in the closing hours of 2020 indicates the growing underlying support developing across the complex. But even though prices have shown potential of new life and longer-term strength, the ability to test resistance levels above $16 per cwt will be important in continuing the market support. A move above $16.25 in February futures would technically break above the sideways market range that has confined the entire cattle complex through the fall months. With renewed support developing in cash cattle and boxed beef markets, this week appears to be the best opportunity to break out of the previous pattern. A technical shift higher at the end of the year could create significant momentum during the month of January, helping to break away from the previous pattern, which has restricted market growth. Boxed beef values remained mixed Monday, although the underlying firming tone is expected to continue with the market appearing to have stabilized over the last week. The potential for light-to-moderate gains at the end of the month would help to confirm further support, although trade volume is likely to remain light in the last few days of 2020.

Lean hog futures continue to hover in a narrow-to-moderate trading range near the top end of short-term market ranges. The price pressure on Monday is not technically significant as traders expect trade to remain subdued through the end of the month. The ability to keep February futures above $66 per cwt, and April futures over $70 per cwt is likely to spark renewed longer-term support as traders focus on increased pork demand even after the holiday buying wraps up. Increased underlying activity is likely over the next couple of sessions, although outside market moves will play a significant role in the movement and direction of hog trade during the week. Pork cutout values surged higher, creating additional fundamental market support through the complex. Pork values are likely to remain volatile in the next few days, as swift price shifts in individual pork cuts will continue to have a significant impact in directing the overall pork value. Wide wholesale market swings are typically seen during the holiday weeks with buyers wrapping up holiday needs but making longer-term purchases for needs of product for the coming weeks and months. Cash hog bids are expected $1 lower to $1 per cwt higher with most bids expected steady to 50 cents lower. Tuesday slaughter numbers are expected near 488,000 head.

	BULL SIDE		BEAR SIDE
1)	Cash market optimism remains strong in cattle markets following the Christmas week gains and underlying support in futures trade Monday. This is creating significantly higher asking prices with feeders not likely to settle for steady money going into 2021.	1)	Winter storms moving through much of the northern cattle country will significantly impact feedlots over the near future. Although this may not be a large enough event to spark aggressive futures market strength, it will significantly impact daily gains and production costs over the next few days, at least.
2)	February live cattle futures are testing long-term support at $16.25 per cwt. A move above these levels through the week is likely to spark renewed technical buying and set the tone for renewed market movement through the month of January.	2)	Despite the strong developing support in cash and futures trade, boxed beef values have had a hard time showing renewed market strength and are continuing to hold near recent market lows. Without firmer boxed beef values in the next two weeks, cash market optimism will derail.
3)	Pork cutout values surged higher Monday, sparked by $5 to $6 per cwt gains in loin and belly markets. With holiday buying wrapping up, the focus moves away from ham cuts and to the importance of belly, rib and loin market support moving into the new year.	3)	Cash hog values continue to struggle to regain market support as reduced packer schedules are leaving plenty of market-ready hogs available in the country. This could continue to limit cash hog market prices well into January.
4)	Traders will continue to focus on the ability to move larger amounts of pork product in domestic markets through the end of the year. But renewed interest in export trade to China will continue to be needed to maintain the price strength seen through the complex.	4)	Lean hog futures have been unable to hold last week's highs, creating growing concern that follow-through weakness may develop during the lightly traded holiday week. The lack of volume in the market may also create unneeded wide price swings, which could have a significant impact on market direction at the end of the year.

Monday Closing Livestock Market Update - Cattle Keep Rallying

GENERAL COMMENTS:

It was a good start to a new week for the cattle contracts, but the lean hog market traded lower throughout the day, not able to find the same support that's surfaced in the cattle market. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.39 with a weighted average of $50.04 on 10,857 head. March corn is up 5 1/2 cents per bushel and March soybean meal is down $1.40. The Dow Jones Industrial Average is up 204.10 points and NASDAQ is up 94.69 points.

LIVE CATTLE:

The live cattle contracts took ahold of Monday's support and ran while traders were willing. February live cattle closed $0.80 higher at $115.77, April live cattle closed $0.55 higher at $119.52 and June live cattle closed $0.32 higher at $114.80. It's exciting to see the April contract etch closer to $120.00, and for the marketplace to see ample support both technically and fundamentally. Last week's stronger cash cattle trade did the countryside not only a favor from a market perspective, as cash prices were anywhere from $2.00 to $5.00 higher, but also psychologically as feedlots are gunning for higher prices again this week. There's yet to be any action develop throughout the countryside, but some feedlots in Eastern Nebraska have priced their cattle upwards of $180 but asking prices in the Southern Plains are still unknown. Monday's slaughter is estimated at 119,000 head, steady with a week and year ago. Trade is not expected to develop until maybe late Tuesday or Wednesday.

Boxed beef prices closed mixed: choice up $0.28 ($207.82) and select down $1.28 ($196.65) with a movement of 160 loads (85.68 loads of choice, 35.93 loads of select, 23.03 loads of trim and 15.80 loads of ground beef).

TUESDAY'S CASH CATTLE CALL: $2.00 to $4.00 higher. Feedlots are tired of selling cattle for cheap, and are ready for 2021 and greater profitability. A strong mindset and eagerness to capture more of this week's market will likely help feedlots get their asking prices and more the market higher once again.

FEEDER CATTLE:

The resiliency in the feeder cattle market carried through the day's close, allowing nearby contracts to close higher despite elevated corn prices, but, unfortunately, the deferred contracts did scale slightly lower before closing. January feeders closed $0.07 higher at $141.00, March feeders closed $0.27 higher at $142.60 and April feeders closed $0.20 higher at $144.12. The feeder cattle market would like to rally boldly alongside the live cattle contracts, but these strong corn prices are making feedlots recheck their breakevens. At Sioux Falls Regional Cattle Auction in Worthing, South Dakota, compared to two weeks ago, the market was too lightly tested to make an accurate comparison on steers, but heifer calves traded mostly steady. This week's offering was different that the sale two weeks ago, which made it hard to compare the cattle that sold. Nonetheless, yearling heifers were $3.00 higher, except those weighing 800 to 850 pounds, which were $5.00 to $10.00 higher. Only a few steer and heifer calves traded as most producers are waiting until after the first of the New Year to start marketing those calves when demand hopefully resurfaces. Slaughter cows were $3.00 to $6.00 higher with instances of even $8.00 higher, slaughter bulls were not well tested. The CME feeder cattle index for Dec. 25: down $0.17, $138.29.

LEAN HOGS:

The hog market wasn't as prosperous as the cattle contracts were through Monday's trade and ultimately the market closed lower. February lean hogs closed $0.45 lower at $66.50, April lean hogs closed $0.35 lower at $70.75 and June lean hogs closed $0.45 lower at $81.87. It would appear that Monday's pork cutouts were considerably larger, as pork cutouts totaled 582.52 loads, but that's taking into account everything from Dec. 24-25, and everything up until 2:00 p.m. (CST) Monday afternoon. Given that the USDA wasn't open for those two days, they simply compiled those extra figures into Monday's report. Pork cutouts total 582.52 loads with 539.67 loads of pork cuts and 42.86 loads of trim. Pork cutout values: up $2.51, $71.85. Monday's slaughter is estimated at 490,000 head, 3,000 head more than a week ago and 5,000 head more than a year ago. The CME lean hog index for Dec. 24: not available at this time.

TUESDAY'S CASH HOG CALL: Lower. With there being plenty of market-ready hogs lining the countryside, packers aren't going to be wildly aggressive in this week's cash market as it's once again a shortened holiday week.

Monday Midday Livestock Market Summary - Cattle Contracts Keep Pushing Higher

 General Comments

The cattle contracts continue to soar higher into Monday's afternoon trade as technical and fundamental support is ample in the marketplace. The lean hog contracts are trading lower as traders are less confident about the market's consumer demand and fundamental backing. March corn is up 3 cents per bushel and March soybean meal is down $0.20. The Dow Jones Industrial Average is up 204.72 points and NASDAQ is up 116.75 points.

LIVE CATTLE

Following last week's strong cash cattle trade, the live cattle market isn't interested in slowing down its pace to welcome in the New Year but would rather carry the market's strong momentum into 2021. February live cattle are up $0.97 at $115.95, April live cattle are up $0.60 at $119.57 and June live cattle are up $0.37 at $114.85. As the market looks to the New Year and hopes for new opportunities, the market's underlying support only continues to build as boxed beef prices scale higher, cash cattle trade is demanding attention and slaughter speeds remain elevated. Feedlots are anticipated to price cattle $1.00 to $2.00 higher, through early bids and asking prices have yet to surface this week. New showlists appear to be somewhat higher in Texas, and larger in Kansas, Nebraska and Colorado.

Last week's cash cattle trade was larger than anticipated with 85,698 head selling. Of that 65,159 head are committed for delivery in the next upcoming two weeks while the remaining 20,539 head are for delivery in the next 15 to 30 days.

Boxed beef prices are higher: choice up $1.00 ($208.54) and select up $0.48 ($198.41) with a movement of 87 loads (45.03 loads of choice, 16.99 loads of select, 13.02 loads of trim and 12.29 loads of ground beef).

FEEDER CATTLE

The feeder cattle contracts are liking what Monday has to offer and show no sign of retreating while traders are interested in moving the market higher. January feeders are up $.80 at $141.72, March feeders are up $1.10 at $143.42 and April feeders are up $0.95 at $144.87. As the market prepares for feeder cattle to once again hit the market mainly after the first of the year, buyers are eyeing the futures complex and are loving the market's long-term strength. For those looking to buy calves early this winter and summer them on grass, the late summer early fall futures are aligning perfectly as the August 2021 through October 2021 contracts are all trading above $150.00.

LEAN HOGS

While the cattle contracts are soaking up the market's support, the lean hog contracts are veering lower as traders aren't as keen on investing in the hog market. February lean hogs are down $0.72 at $66.22, April lean hogs are down $0.55 at $70.55 and June lean hogs are down $0.52 at $81.80. With the number of market ready hogs being ample, producers are trying to get hogs worked through the system so that currentness can be achieved and hopefully producers will see higher prices in the future.

The projected lean hog index is unavailable at this time. Hog prices are lower on the National Direct Morning Hog Report, down $0.51 with a weighted average of $49.92, ranging from $44.00 to $52.00 on 9,777 head and a five-day rolling average of $50.10. Pork cutouts total 352.65 loads with 331.66 loads of pork cuts and 20.99 loads of trim. Pork cutout values: up $6.09, $75.43.

Monday Morning Livestock Market Update - Cattle Feeders Focus on Expanding Christmas Week Gains

 General Comments:

Even though activity Monday is expected to return to the sluggish early week routine, cattle feeders are stepping back into the market with even more intensity and expectations of turning the "Christmas" rally into a "New Year's" rally by the end of the week. Cash cattle trade developed midweek last week like expected, but with live business done at $109 to $110 per cwt, ($2 per cwt higher) and dressed business gaining underlying support at mostly $172 per cwt (as much as $7 per cwt higher), the momentum for higher cash money closing out 2020 is not only possible but is the expectation. Packers will be busy focusing on inventory during the morning with bids and asking prices not likely Monday, but it is expected to be another early week of trade with markets and plants closed on Friday for New Year's Day. The need to buy cattle for full weekly runs during January is sparking renewed optimism through the entire cash cattle market and likely to spill into futures trade during morning trade.

Live cattle futures are expected to be firm to higher early Monday morning as traders return from the Christmas holiday. Although this week will likely see another round of limited futures market movement due to the end of week holidays keeping markets closed, and many traders expanding time off between Christmas and New Year's, the combination of firming cash cattle markets and outside market moves is likely to stimulate early gains Monday morning. With President Trump signing the latest round of Covid-19 relief bill Sunday, the expectation is that widespread outside market support will be seen early Monday, sparking additional buyer momentum through live cattle and feeder cattle trade.

Holiday limited trade activity put pressure on nearby lean hog futures Thursday before the long holiday weekend. This is likely to bring about mixed trade early Monday as traders prepare for what could be another sluggish week of trading due to limited participation and another short trading week. The ability to align firm buyer support in all nearby contracts has the potential to move nearby contracts to month-long highs, sparking renewed underlying activity in the entire complex. This may add further activity levels through the entire complex with traders looking for spillover support from outside markets Monday morning.

With USDA offices closed last Thursday for Christmas Eve, limited cash and meat market reports and information is available, leaving markets searching for additional early morning direction. This could lead to moderately mixed price direction with the focus on Monday's pork cutout and cash hog moves later in the day Monday.

Cash hog bids are expected $1 lower to $1 per cwt higher with most bids expected steady to 50 cents higher. Monday slaughter numbers are expected near 486,000 head.

	BULL SIDE		BEAR SIDE
1)	Sharp gains in cash cattle trade last week was a well-earned Christmas gift to feeders. This is expected to spark renewed optimism through the week with additional active gains sought when feeders price cattle over the next two days.	1)	Shortened trading weeks, and packer runs at the end of the year, will put the focus on trying to keep the market current. This could lead to heavier cattle weights during the month of January.
2)	Firm momentum in live cattle trade is testing long-term resistance levels of $115.27 per cwt. A move above this price level could spark additional technical buying.	2)	Another round of winter storms moving through the upper Midwest is expected to severely limit cattle gains through the week. This will cause increased cost of gains and delayed deliveries in some areas.
3)	Strong pork demand support continues to focus on the ability to actively move pork product in domestic and export markets.	3)	Limited support in cash hog prices through the end of the year is creating limited support based on the amount of market-ready hogs in the system.
4)	Last week's Cold Storage report posted the lowest frozen pork supplies in the last 10 years. This tightening of supplies has the potential to spark renewed buyer support based on expected continued movement during early 2021.	4)	Packer speeds are expected to try to return back to normal following the holiday week. But upcoming winter storm events may create significant challenges in moving hogs and limiting workers at many plants. This could quickly reduce overall daily plant runs through the end of the week.

Thursday Closing Livestock Market Update - Contracts Close Strong on Christmas Eve

 GENERAL COMMENTS:

Thursday rounded out the week in a strong manner for the livestock sector with as a higher close seen in most contracts. Heading into next week, the market is sitting in a fine position to see the futures market supported again and to see robust cash cattle trade. March corn is up 3 3/4 cents per bushel and March soybean meal is down $4.90. The Dow Jones Industrial Average is up 70.04 points and NASDAQ is up 33.62 points.

** The futures market closed early Thursday afternoon and will not trade at all on Friday. USDA will not be sharing any reports on Thursday or Friday but will be back Monday morning.

Merry Christmas!

LIVE CATTLE:

Feedlots are kicking up their heels and rolling into the Christmas holiday with a little extra cheer this year. Prices are still lower than what they'd like to see, but a stronger trading week on both the board and throughout the cash market helps cheer up everyone's spirit. December live cattle closed $0.22 higher at $112.15, February live cattle closed $0.25 higher at $114.97 and April live cattle closed $0.27 stronger at $118.97. The bulk of this week's cash cattle trade developed midday Wednesday as feedlots were dead set on getting their full asking prices. There was a little clean-up trade Thursday but only on a limited sample in Nebraska. Southern live cattle traded for mostly $110 (which is $2.00 higher than last week), live cattle in the North traded for mostly $109 to $110 ($1.00 to $2.00 stronger) and dressed cattle in the North traded for $172 ($4.00 higher).

MONDAY'S CASH CATTLE CALL: Higher. Seeing that packers have only bought limited supplies for the last three weeks leads one to believe that next week's trade is going to be stout as packers will need cattle. The South has already come out and said that they intend to price their cattle $2.00 higher at $112.

FEEDER CATTLE:

The feeder cattle contracts clung to their profits through closing and had a successful day before heading into the holiday weekend. January feeder cattle closed $0.65 stronger at $140.92, March feeders closed $0.37 higher at $142.32 and April feeders closed $0.17 higher at $143.92. Heading into next week's trade, the countryside will be idle as most sale barns aren't having feeder cattle sales until after the first of the year, but there are some large female sales scheduled. The CME feeder cattle index for Dec. 23: down $0.17, $139.82.

LEAN HOGS:

The lean hog complex shot higher Wednesday afternoon and for the most part was able to defend its new position through Thursday's close. Nearby contracts fought some modest pressure but for the most part the market closed higher. February lean hogs closed $0.90 lower at $66.95, April lean hogs closed $0.20 lower at $71.10 and June lean hogs closed $0.17 higher at $82.32. The hog market really needs to see some fundamental support come in to compliment the technical movement the markets recently had. The CME lean hog index for Dec. 22: down $0.42, $61.62.

MONDAY'S CASH HOG CALL: Steady. It wouldn't be surprising to see the cash hog market modestly supported early next week as packers come off a long weekend. 

Thursday Midday Livestock Market Summary - Contracts Try to Defend Gains Heading into Afternoon

 General Comments

The livestock contracts are trying to trade higher and for the most part the contracts are making a good run at the day. Once again, the market's underlying support continues to move the market higher even with few traders participating in the market. The cash cattle market has been mostly uneventful though there's been some light trade in the North at $110. March corn is up 2 1/2 cents per bushel and March soybean meal is down $2.70. The Dow Jones Industrial Average is up 21.94 points and NASDAQ is up 16.70 points.

** USDA will not be releasing any reports Thursday or Friday, and the futures market will close early Thursday and not be open at all Friday. DTN will share market commentary for Thursday's trade, but will take Friday off to celebrate the Christmas Holiday!

LIVE CATTLE

Heading into the afternoon, the live cattle contracts are scaling fully higher with modest gains despite the market being thin due to the Christmas holiday. December live cattle are up $0.22 at $112.15, February live cattle are up $0.35 at $115.07 and April live cattle are up $0.25 at $118.95. With boxed beef prices finding a seasonal bottom, and with the advancements in the cash market, the market slides into the holiday weekend in a fine position to welcome next week and hopefully offer an opportunity to stronger trade once again. There's been some light cash cattle trade in Eastern Nebraska for $110, but otherwise the market sits idle.

FEEDER CATTLE

The feeder cattle contracts are trying to persuade the market into trading fully higher, but the market's support only seems to stem to nearby contracts and lets the deferred contracts trade mildly lower. January feeders are up $0.80 at $141.07, March feeders are up $0.60 at $142.55 and April feeders are up $0.30 at $144.05. Next week will be a quiet one for feeder cattle sales as most sale barns are closed until after the New Year.

LEAN HOGS

Modest pressure is trying to creep into the lean hog marketplace but so far the contracts have been able to combat its pressure other than in a couple nearby contracts. February lean hogs are down $1.10 at $66.75, April lean hogs are down $0.47 at $70.82 and June lean hogs are steady at $82.15. Following Wednesday's steep advancement, the market hopes to keep as much of the conquered territory as possible before the day's early close.

Thursday Morning Livestock Market Update - Traders Likely to Ride Midweek Gains Into Christmas Eve

 General Comments:

Moderate trade seen Wednesday sparked increased widespread interest across the entire cattle complex with feeders unwavering in their demands going into Christmas and able to post strong weekly gains before calling it a week. It is expected that business will be done in most areas, although the possibility for a few leftover deals may be seen if anyone is around to pick up the other end of the phone Christmas Eve. Live trade developed from $109 to $110 per cwt, with most business at $110 per cwt. This is $2 or more higher than last week. Dressed trade in the North developed at $168 to $172 per cwt with most trade nearing the $172 per cwt levels. These prices are seen $2 to $4 per cwt above last week's market movements, and sparked renewed optimism that quickly carried over into the futures complex. At this point, any cattle left over on showlists are likely to be held over until next week with higher price tags hung around their neck given the building market support.

Boxed beef values did weaken as the pre-holiday market support was not carried over to the wholesale beef complex. Although this is not expected, as limited buying interest is seen before the Christmas holiday, the focus on price weakness could cause some uncertainty Thursday morning in nearby futures trade. Choice cuts led the market lower, falling $3.13 per cwt, creating limited underlying concerns that a bottom may not be established just yet. With USDA closed for the Christmas holiday, boxed beef reports will not be released Thursday, leaving limited market direction as very few traders have stuck around anyway.

Live cattle futures are expected to remain lightly traded Thursday morning with markets closing early due to the abbreviated holiday trading schedules. The strong upward momentum seen in futures and cash market trade Wednesday will likely help to stimulate follow through buyer support early in the session. But the few traders who are planning on remaining active in the market may be looking for positioning opportunities. The day before a major holiday is always uncertain as prices tend to either barely move and markets remain extremely quiet, or wide price swings develop. At this point, we won't know which kind of Christmas Eve this will be for cattle futures until opening bell.

Active gains quickly developed in lean hog futures trade Wednesday afternoon. The focus on reduced pork supplies in freezers, combined with strong underlying support in all livestock trade helped to curb any concerns through the complex as February futures led the market higher with a $1.87 per cwt gain. Light trade is expected Thursday, which is likely to spark renewed support through the complex heading into the weekend. But mixed market moves may redevelop as very limited trade volume through the holiday-shortened trading session could bring renewed volatility across the entire complex.

Hog inventory levels as of December 1 fell 1% with 77.5 million head in the nations hog herd. This is the lowest number since June and follows the expected market contraction seen over the last few months. Report totals fell in line with pre-report estimates, which is likely to create limited reaction to the report. Farrowing intentions will be the biggest shift in the report, with December through February farrowing intentions expected at 102%, which is above estimates. Although this may not have significant short term market implications or immediate market impact, it does indicate that larger supplies are likely to redevelop through the end of 2021 and beyond.

Renewed holiday supported gains developed in pork cutout values Wednesday, leading to the potential for underlying fundamental support through the end of the year. With government offices closed, the lack of meat value data released Thursday will cause some uncertainty of market direction until next week.

Cash hog bids are expected $1 lower to $1 per cwt higher with most bids expected steady to 50 cents lower. Thursday slaughter numbers are expected near 262,000 head. Saturday runs are expected at 68,000 head.

	BULL SIDE		BEAR SIDE
1)	Sharp gains in cash cattle trade Wednesday was a well-earned Christmas gift to feeders, as the resolve to higher asking prices paid of ahead of the long holiday weekend.	1)	Midweek losses in beef cutout values was a unwelcome surprise given the support through the rest of the complex. The inability to hold recent support levels through the end of the year could quickly unwind futures gains seen during the week.
2)	Active triple-digit gains in live cattle futures sparked renewed buyer support through the lightly traded holiday week. With trading hours shortened Thursday, market support is expected to be carried over to the complex.	2)	Lackluster beef exports last week continues to create uncertainty and concern about potential market support during early 2021, especially to normal export trade partners.
3)	Spot February lean hog futures have tested December highs following an aggressive triple-digit rally midweek. This move higher could spark renewed pre-holiday buying, further pointing to market firmness at the end of 2020.	3)	Cash hog prices continue to erode as packers are gearing up for a slow next few days of packer activity. With Thursday's plant runs significantly reduced due to Christmas Eve, and normal activity not expected until Monday, packers are able to find adequate market ready hogs at lower prices through the holiday weekend.
4)	Active gains redeveloped in pork cutout values on the last day reports will be listed for the week. The ability to stabilize pork cuts heading into Christmas break is likely to add market support early next week also.	4)	Higher than expected farrowing intentions over the next quarter are likely to limit overall herd reductions seen through the year. This could limit long-term market support in all hog trade.

Wednesday Closing Livestock Market Update - Contracts Felt the Christmas Spirit

 GENERAL COMMENTS:

It was a great day for the live cattle contracts and phenomenal day for the cash cattle market as both markets head into Christmas Eve fully higher. Thursday's trade isn't expected to amount to much, with most traders taking the day off and market volumes being slim. There's a big snowstorm rolling along I-29 from Omaha all the way to Grand Forks, North Dakota, and extending along I-90 up into Minnesota, which is creating some nasty blizzard conditions and will most certainly stress livestock. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.88 with a weighted average of $50.44 on 9,110 head. March corn is up 3 3/4 cents per bushel and March soybean meal is up $4.70. The Dow Jones Industrial Average is up 114.32 points and NASDAQ is down 36.81 points.

** USDA will not be releasing any report Thursday or Friday, and the futures market will close early Thursday and not be open at all Friday. DTN will share market commentary for Thursday's trade, but will take Friday off to celebrate the Christmas Holiday!

LIVE CATTLE:

Feedlots got their Christmas wish as the South was once again able to move the cash cattle market $2.00 higher and the North saw a $4.00 jump in dressed prices and $1.00 to $2.00 gain in live prices. Following Tuesday's minor correction, Wednesday's futures market came back with substantial support that obviously favored feedlot's position this week. December live cattle closed $1.60 higher at $111.92, February live cattle closed $1.27 higher at $114.72 and April live cattle closed $1.05 higher at $118.70. There was considerable movement in the South for mostly $110, which is easily $2.00 higher than a week ago, and a modest movement in the North for $109 to $110 live and $172 dressed. Wednesday's slaughter is estimated at 116,000 head, 4,000 head less than a week ago and incomparable to a year ago with the Christmas holiday. This week's movement is still relatively light, but given that it's a holiday week that's expected.

For the week ending Dec. 12, actual slaughter data shared that slaughter totaled 663,869 head and carcass weights remain on a steady, downward trend. Steer carcass weights were steady with a week ago at 922 pounds, but heifer carcass weights dropped two pounds to average 848 pounds.

Boxed beef prices closed lower: choice down $3.13 ($207.54) and select down $1.66 ($197.93) with a movement of 119 loads (68.18 loads of choice, 23.48 loads of select, 9.85 loads of trim and 17.58 loads of ground beef).

THURSDAY'S CASH CATTLE CALL: Steady with the week's trade. It's very unlikely that Thursday sees some cash cattle trade given that its Christmas Eve and feedlots are assuming packers will come back next week and move the cash market even higher, but then again it is 2020 for a couple of more days and anything is possible.

FEEDER CATTLE:

The feeder cattle contracts squeaked by and closed fully higher Wednesday afternoon. January feeders closed $0.37 higher at $140.27, March feeders closed $0.07 higher at $141.95 and April feeders closed $0.17 stronger at $143.75. Following Tuesday's mild correction, the contracts scaled slightly higher into the Christmas holiday thanks to the underlying support that's building in the cattle contracts. The market is shaping up into a fine position to roll into a strong New Year. The CME feeder cattle index for Dec. 22: up $0.25, $139.99.

LEAN HOGS:

Before traders completely clocked out for the week, they fueled the lean hog contracts considerably higher and allowed for the market to close fully higher. February lean hogs closed $1.82 higher at $67.85, April lean hogs closed $1.27 higher at $71.30 and June lean hogs closed $0.95 higher at $82.15. The Quarterly Hogs and Pigs report was released Wednesday afternoon and thankfully it came with no big surprises. The market was concerned about how many hogs would fall into the 120- to 179-pound category, which ended up coming in steady with 2019 levels at 15,246,000 head, and the 180 pounds or more category came in at 13,980,000 head, which is 1% higher than a year ago. Overall, the market shouldn't see significant pressure from the report but knows all too well that its essential to keep slaughter speeds elevated to get these hogs worked through the system. The CME lean hog index for Dec. 21: down $0.51, $62.04.

Pork cutout totaled 280.91 loads with 247.33 loads of pork cuts and 33.58 loads of trim. Pork cutout values: up $1.18, $69.34. Wednesday's slaughter is estimated at 451,000 head, 32,000 head less than a week ago and incomparable to a year ago with the Christmas holiday. Tuesday's hog slaughter was revised to 473,000 head.

Actual slaughter data shared positive news for the pork industry. For the week ending Dec. 12, live carcass weights remained steady at 295 pounds but dressed weights dropped a pound to average 219 pounds.

THURSDAY'S CASH HOG CALL: Lower. Given that its Christmas Eve, the cash hog market will be extremely quiet with little to no action.

Wednesday Midday Livestock Market Summary - Contracts Catch Another Gust of Support

Though the livestock contracts trailed into Wednesday with a shaky start, the market leans into the afternoon fully higher. There's been some light trade from the Fed Cattle Exchange for $110, which has feedlots grinning from ear to ear as the market should be able to trade fully higher, especially considering that the board is trading positively. March corn is up 5 3/4 cents per bushel and March soybean meal is up $6.20. The Dow Jones Industrial Average is up 208.41 points and NASDAQ is up 9.43 points.

LIVE CATTLE

Feedlots have seen their Christmas wishes come true as the cash cattle market jumps $2.00 higher in the South while the North has yet to test this week's market. It's been helpful that Wednesday's futures complex has traded higher and continues to do so rolling into the afternoon. December live cattle are up $1.07 at $111.40, February live cattle are up $0.92 at $114.35 and April live cattle are up $0.80 at $118.45. More cash cattle trade is expected to develop Wednesday afternoon as the North still needs to move some cattle. This week's trade is anticipated to be light again, but next week's trade should be sizable. There's a big snowstorm rolling along I-29 from Omaha all the way to Grand Forks, North Dakota and extending along I-90 up into Minnesota. Heavy winds and blizzard conditions are making travel difficult.

Boxed beef prices are lower: choice down $1.92 ($208.75) and select down $0.90 ($198.69) with a movement of 58 loads (31.16 loads of choice, 11.33 loads of select 7.83 loads of trim and 7.85 loads of ground beef).

FEEDER CATTLE

The feeder cattle complex has been the last to jump on the bandwagon to trade higher, and for the most part the contracts are trading higher into the afternoon even though corn prices are rallying $0.05 in nearby contracts. January feeders are up $0.32 at $140.22, March feeders are down $0.07 at $141.80 and April feeders are up $0.02 at $143.60. The market has had phenomenal technical support over the last month and really has blazed a path for strong fundamental support to carry feeder cattle prices higher throughout the countryside.

LEAN HOGS

The lean hog market is seeing substantial support develop heading into the afternoon as nearby contracts rally anywhere from $0.70 to $1.07 higher. February lean hogs are up $1.07 at $67.10, April lean hogs are up $0.72 at $70.75 and June lean hogs are up $0.45 at $81.65. The market is waiting anxiously for Wednesday's Quarterly Hogs and Pigs Report which will share key insight as to how what the market's availability of hogs looks like for the near future.

The projected lean hog index for 12/22/2020 is down $0.42 at $61.62, and the actual index for 12/21/2020 is down $0.51 at $62.04. Hog prices are lower on the National Direct Morning Hog Report, down $1.03 with a weighted average of $50.29, ranging from $44.00 to $52.00 on 5,540 head and a five-day rolling average of $50.78. Pork cutouts total 157.73 loads with 130.92 loads of pork cuts and 26.80 loads of trim. Pork cutout values: down $1.69, $66.47.

Wednesday Morning Livestock Market Update - Limited Interest Trickles into the Christmas Holiday

 General Comments:

As feeders quickly approach the Christmas holiday, cash cattle markets still remain relatively quiet going into Wednesday morning. The expectation continues that both sides would desire to wrap up trade sometime today, in order not to have to break away from Christmas preparations on Christmas Eve. But time is running out if all needed trade will develop through the day. The amount of cattle needed in the negotiated market is still uncertain as packers will run reduced schedules this week and next, limiting the immediate need for cattle. But the fact that full packer runs will develop the week of January 4th, should stimulate some additional holiday buying. Cattle are being priced at $110 and higher live and $172 and higher dressed, while packers continue to focus on the market leverage they have had (especially in the North) over the last few weeks with a desire to limit cash sales to steady at best. The underlying support in boxed beef trade during the week seems to be pointing to further resolve from the feedlot community, but it is uncertain if feeders will leave cattle unsold over Christmas if desired prices are unavailable.

Beef stocks in freezers increased in Tuesday's cold storage report, increasing 2% from October levels, and up 7% from year-ago levels. Beef cuts was the only beef category to see reduced stocks, falling 4% from last month, but cuts also posted the most aggressive gain compared to last year with a 15% gain. A total of 511.4 pounds are in the nations freezers at the end of November, further accenting the large cattle weights seen over the last couple of months able to put increased product into the system.

Boxed beef values were mixed to mostly higher with limited pressure in choice cuts offset by triple digit gains in the select market. This helped to solidify increased livestock equivalents, focusing on increased product value through the holiday week. The ability to sustain beef market growth through the holidays and end of the year is likely to add increased fundamental support into the complex heading into January and 2021.

Livestock trade remains vulnerable to very light holiday trade activity. As seen time and time again during these holiday weeks, fundamental and technical market factors can sometimes be thrown out the window, leaving increased price volatility. The very thinly traded markets leaves prices vulnerable to moderate to wide price swings, and many times it appears that lower market moves develop due to lack of sell-stops put in place. The triple-digit losses seen Tuesday in both live cattle and feeder cattle trade still kept prices well within the wide sideways trading range, but did create questions of further market pressure developing in the two sessions before the holiday break that remain this week. It is uncertain just how much pull steady to higher cash cattle trade will have to the futures complex this week, although traders are also preparing to move contracts into 2021, so it is unlikely that markets will break outside of technical support over the next few days.

Lean hog futures trade remains lightly traded during the first half of the week with narrow price moves likely early Wednesday morning. The complex remains focused on a "report-heavy" day as at the time markets open, traders will have both cold storage report data and weekly export sales data to trade, with the focus on the afternoon quarterly hogs and pigs report released after markets close. This could create moderate price shifts through the morning, although widespread price swings are not likely to develop at this point.

Pork supplies decreased, with total pork in storage falling 7% from last month, and down 28% from year-ago levels. The continued strong export movements through the year combined with increased strength in domestic markets continues to keep clearing active product, although the lower price levels seen over the past few months is helping to stimulate additional widespread movement. Pork bellies created the biggest volatility and potentially concern, with inventories increasing 21% from October levels, but falling 58% from last year.

Traders will focus on the morning export sales report Wednesday morning due to government offices being closed Thursday for Christmas Eve. Active movements to China will be the main focus once again. Traders are also looking forward to the quarterly hogs and pigs report. It appears that most estimates are looking for a 1-3% decrease in overall hog supplies on December 1st, with most averages settling on a 1% drop. Reductions in further farrowing intentions are also expected, which should help to contract the hog industry through the summer of 2021.

Sharp losses in pork cutout values was led by aggressive losses in ham and belly cuts. The overall pressure focused on holiday buying wrapping up, at least from a wholesale side of the equation, which could leave pork values unsupported over the near future.

Cash hog bids are expected $1 lower to $1 per cwt higher with most bids expected steady to 50 cents lower. Wednesday slaughter numbers are expected near 482,000 head. Saturday runs are expected at 60,000 head.

	BULL SIDE		BEAR SIDE
1)	Continued firmness in boxed beef values points to increased underlying support developing through the holiday season.	1)	Limited early-week movement in cash cattle trade adds concerns about the ability for feeders to push prices higher before the Christmas break.
2)	Continued active packer interest through the holidays and well into 2021 should help to continue to clear market ready cattle, potentially limiting overall carcass weights over the coming weeks.	2)	Triple-digit losses in live cattle and feeder cattle futures Tuesday signifies the impact of limited trade volume in the market, and how markets can remain extremely vulnerable to wide market swings despite no change in fundamentals.
3)	Significant reductions in pork cuts at the end of November points to continued tightness in pork supplies, and should help to stimulate limited but continued buying in the coming weeks.	3)	Pork exports are expected to remain strong through the end of the year, but limited movement in the Wednesday report could spark underlying price pressure in nearby futures contracts.
4)	Hog inventory levels are expected to see light to moderate reductions in Wednesday's quarterly hogs and pigs report. The trend of reducing hog supplies seen over the past two quarters is expected to continue, focusing on tighter supply levels during the second half of 2021.	4)	Sharp losses in pork cutout prices was led by active pressure in ham and belly cuts. This is likely to cause market pressure through the rest of the week based on pork cutout values falling over $4 per cwt in one day.

Tuesday Closing Livestock Market Update - Cattle Sink Lower While Hogs Battle Higher

GENERAL COMMENTS:

It was a downward sliding day for the cattle contracts, but the lean hog market was able to secure a slightly higher close right before the day's end. Wednesday's trade is expected to be quiet, without a lot of action developing, but the countryside will be busy with the week's cash cattle trade and the unveiling of the Quarterly Hogs and Pigs report. Hog prices closed $0.60 higher on the National Direct Afternoon Hog Report with a weighted average of $51.40 on 9,161 head. March corn is up 3 1/2 cents per bushel and March soybean meal is up $2.20. The Dow Jones Industrial Average is down 200.94 points and NASDAQ is up 65.40 points.

LIVE CATTLE:

The live cattle contracts scaled lower Tuesday without much hope of trading higher. December live cattle closed $0.27 lower at $110.32, February live cattle closed $1.20 lower at $113.45 and April live cattle closed $1.05 lower at $117.65. There was a little chatter throughout the countryside Tuesday afternoon but upon the closing whistle, the market had yet to be truly tested. Feedlots are continuing to push $1.00 to $2.00 higher while packers would obviously like to see the market trade steady at best. Thankfully the upward trend in boxed beef prices are favoring sellers and its likely that, come Wednesday, feedlots will grant their wish. It's looking like the week's trade will be rather light, which will make for three weeks in a row of lighter trade and encourage a stronger, more robust market following the week of Christmas. The Southern Plains are asking $110 or better for their cattle, and there have been some feedlots in the North state $172 for their pens of market-ready cattle. Tuesday's slaughter is estimated at 119,000 head, 2,000 head more than a week ago and incomparable to a year ago because of the Christmas holiday.

Boxed beef prices closed mixed: choice down $0.25 ($210.67) and select up $2.33 ($199.59) with a movement of 145 loads (78.82 loads of choice, 23.49 loads of select, 10.01 loads of trim and 33.07 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. Feedlots have dug their heels in the ground again this week and are really pushing for $1.00 or $2.00 higher. There are still some big cattle in the North that could trade steady, but for feedlots with current inventories, higher prices are what they have in mind.

FEEDER CATTLE:

The feeder cattle contracts drifted lower throughout Tuesday's trade as the market's technical support has grown tired right before the Christmas holiday. January feeders closed $0.72 lower at $139.90, March feeders closed $1.25 lower at $141.87 and April feeders closed $1.17 lower at $143.57. As the feeder cattle market looks at taking a break before diving into 2021, the feeder cattle complex sits in a fine position in the short term as buyers are interested in the market and the board has been supportive as 2021 has grown near. At Tri-State Livestock Auction in McCook, Nebraska, compared to a week ago, steer sold steady to $6.00 higher while heifers sold mostly steady. Demand was great and the selection was of high-quality cattle. Buyers that were at the sale were willing to pay a little more given that sales are limited until after the first of the New Year and these cattle carried enough quality to justify the higher prices. The CME feeder cattle index for Dec. 21: up $0.18, $138.74.

LEAN HOGS:

The lean hog market fought pressure throughout Tuesday's trade but before the market closed for the day the contracts snuck past the closing bell with mild gains. February lean hogs closed $0.10 higher at $66.02, April lean hogs closed $0.02 higher at $70.02 and June lean hogs closed $0.17 stronger at $81.20. Wednesday's Quarterly Hogs and Pigs report is going to be one to watch as the market could be gravely pressured if there are more heavy-weighing hogs lining the countryside than anticipated. If the report comes back bullish, the February lean hog contract has room to scale higher if the market's fundamentals will support the movement. Pork cutouts total 353.49 loads with 300.94 loads of pork cuts and 52.55 loads of trim. Pork cutout values: down $4.18, $68.16. Tuesday's slaughter is estimated at 480,000 head, 12,000 head less than a week ago and incomparable to a year ago because of the Christmas holiday. The CME lean hog index for Dec. 18: down $1.17, $62.55.

WEDNESDAY'S CASH HOG CALL: Lower. As Wednesday sits a day away from Christmas Eve, its unlikely that packers will be overly aggressive in Wednesday's purchases.