GENERAL COMMENTS:
Seeing that the cattle contracts are finding modest support heading into Thursday afternoon trade, feedlots that sold earlier in the week are kicking themselves, wishing they would have waited until later in the week. The cash cattle market is still quiet with only a sole bid on the table at $168 in Nebraska and feedlots will continue to have an uphill battle, but a stronger board is always helpful. March corn is down 1/2 cent per bushel and January soybean meal is steady. The Dow Jones Industrial Average is down 63.96 points and NASDAQ is up 43.32 points.
LIVE CATTLE:
Even with boxed beef prices tumbling lower, live cattle contracts are rallying higher as traders seem to have found a renewed interest for the cattle contracts. December live cattle are up $0.62 at $108.00, February live cattle are up $0.97 at $111.95 and April live cattle are up $0.90 at $115.95. The market can comfortably move higher for a while, until reaching resistance levels, at which point the cash cattle market and boxed beef prices would need to change their current direction in order to break through those current levels. The cash cattle market is at a standstill with only one sole bid on the table at $168 in Nebraska; otherwise the market is completely silent. It's unlikely at this point with a considerable amount of cattle traded that feedlots will be able to push the market higher, but they may be able to keep the market from continuing scaling lower this week.
Beef net sales of 3,000 metric tons (mt) reported for 2020 were down 78% from the previous week and 80% from the prior 4-week average. Increases were primarily for Japan (3,300 mt, including decreases of 400 mt), Mexico (1,700 mt, including decreases of 100 mt) and Canada (1,300 mt).
Boxed beef prices are lower: choice down $2.94 ($215.32) and select down $2.05 ($199.60) with a movement of 105 loads (42.57 loads of choice, 15.54 loads of select, 21.48 loads of trim and 25.21 loads of ground beef).
FEEDER CATTLE:
Feeder cattle contracts found modest support Thursday morning as traders take to buying back into the cattle contracts. January feeders are up $1.15 at $138.12, March feeders are up $0.85 at $139.60 and April feeders are up $0.77 at $141.20. The market is a long way from nearby resistance and if key fundamental aspects strengthen, the market may be able to scale higher. Feeders are loving the nice weather that has permitted excellent gains and hope to keep their pens dry for as long as possible.
LEAN HOGS:
The lean hog market wanes lower as traders look at investing in the cattle contracts instead of the hog contracts. December lean hogs are down $0.25 at $64.87, February lean hogs are down $0.85 at $65.42 and April lean hogs are down $0.57 at $69.17. Again, one wants to look at the higher midday cutout value and get excited, but until follow-through support is evident, a wishy-washy cutout value doesn't help support the market.
Pork net sales of 26,500 mt reported for 2020 were down 15% from the previous week and 13% from the prior 4-week average. Increases primarily for Mexico (10,400 mt, including decreases of 900 mt), China (6,300 mt, including decreases of 1,900 mt) and Japan (5,500 mt, including decreases of 200).
The projected lean hog index for 12/9/2020 is down $0.05 at $65.61, and the actual index for 12/8/2020 is up $0.04 at $65.66. Hog prices are unavailable on the National Direct Morning Hog Report due to confidentiality. Pork cutouts total 150.13 loads with 120.56 loads of pork cuts and 29.58 loads of trim. Pork cutout values: up $2.87, $80.47.
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