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.
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