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.
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