GENERAL COMMENTS:
Whether or not support was going to develop was shaky Wednesday morning, but around the noon hour traders continued to invest and the market's support solidified. Fundamental factors are weighing on the live cattle market, but other than the spot December contract, even the live cattle contracts were able to close stronger. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.32 with a weighted average of $55.03 on 7,455 head. March corn is up 4 cents per bushel and January soybean meal is up $2.20. The Dow Jones Industrial Average is down 105.07 points and NASDAQ is down 243.82 points.
LIVE CATTLE:
Thankfully as Wednesday progressed into the afternoon, support solidified throughout the live cattle market and allowed for the contracts to close higher, other than in the spot December contract. December live cattle closed $0.47 lower at $107.37, February live cattle closed $0.20 higher at $110.97 and April live cattle closed $0.12 higher at $115.05. The December contract was pressured as weaker cash cattle trade continues to develop, as a small sampling of cattle traded in Nebraska from $106 to $107 live and $168 dressed. This week's cash cattle trade is developing for far softer prices than anticipated. Feedlots could look to recover some market position after the Christmas holiday when the market's schedule begins to level out. Boxed beef prices waned on the spot December contract as well with steep losses in choice cuts. Wednesday's slaughter is estimated at 120,000 head, steady with a week ago and 4,000 head less than a year ago.
Boxed beef prices closed lower: choice down $6.76 ($218.26) and select down $3.77 ($201.65) with a movement of 207 loads (132.29 loads of choice, 39.73 loads of select, 16.53 loads of trim and 18.43 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady with the week's trend. It's unfortunate to see the cash market give away like it has this week. Feedlots will try to combat their loss and push for steady prices, but packers are looking at boxed beef prices and wanting the cash market to lessen.
FEEDER CATTLE:
The corn market carried its strength into Wednesday's close, but the feeder cattle market was able to keep its gusto despite feed price concerns. January feeders closed $0.55 lower at $137.02, March feeders closed $0.30 higher at $138.80 and April feeders closed $0.37 higher at $140.42. At OKC West Livestock Auction in El Reno, Oklahoma, compared to a week ago, feeder steers and heifer traded mostly $1.00 to $2.00 lower except for 800- to 900-pound steers, which traded $2.00 to $4.00 stronger. Feeder heifers sold $1.00 to $3.00 lower and most of the sale was marked with moderate demand. Steer calves under 500 pounds sold $2.00 to $5.00 higher, while steers over 500 pounds sold mostly $1.00 to $3.00 lower and heifer calves traded steady. Warmer temperatures are forecast for the region in the next few days, which is helping feedlots put phenomenal gains on cattle. The CME feeder cattle index for Dec. 8: down $0.94, $137.34.
LEAN HOGS:
The market's support grew throughout the afternoon and led the contracts to a fully higher close. December lean hogs closed $0.57 higher at $65.12, February lean hogs closed $0.67 higher at $66.27 and April lean hogs closed $0.52 higher at $69.75. If Thursday's export report can share some bullish insight into the marketplace, the complex may be able to keep its positive momentum into the later part of the week. Pork cutouts totaled 300.30 loads with 260.34 loads of pork cuts and 39.96 loads of trim. Pork cutout values: down $0.52, $77.60. Wednesday's slaughter is estimated at 496,000 head, 6,000 head more than a week ago and 4,000 head more than a year ago. The CME lean hog index for Dec. 7: down $0.19, $65.60.
THURSDAY'S CASH HOG CALL: Steady. There's some support building in the lean hog market, but whether it will trickle into the cash market is unknown. Packers have ample supplies of readily available hogs that favors their buying position.
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