GENERAL COMMENTS:
It was a phenomenal week for the live cattle market as feedlots were able to again push cash cattle prices higher and the board rallied upon seeing this fundamental strength. Heading into next week, the lean hog market is anxious as a shortened holiday week means slower processing speeds. However, it also means the market is one week closer to the new year where lean hog's optimism lies. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.15 with a weighted average of $54.95 on 5,912 head. December corn was down 2 1/4 cents per bushel and December soybean meal was up $1.40. The Dow Jones Industrial Average was down 289.52 points and NASDAQ was up 54.30 points.
From Friday to Friday, livestock futures scored the following changes: December live cattle up $1.40, February live cattle up $1.60; January feeder cattle up $3.20, March feeder cattle up $4.20; December lean hogs down $2.13, February lean hogs up $1.93.
LIVE CATTLE:
What a week, what a week, WHAT A WEEK! For a while there, a few of you had grown concerned that the cash cattle market was too far gone. But once again, we are reminded how beautiful true price discovery is and how incredible and important the cash cattle market is. Upon regaining some much-needed leverage, the cash cattle market has been able to rally the market to prices not seen since June 2017 and do so while also trading a considerable volume in the cash market. The cash cattle market is too valuable to overlook and to too valuable to ever lose. It is the true heartbeat of the cattle industry.
Feedlots were able to move the cash market higher once again as packers desperately needed cattle to keep their chain speeds elevated. Throughout the Southern Plains live cattle traded from $132 to $134, mostly at $133 to $134, which is $1.00 to $2.00 higher than a week ago. Northern dressed cattle traded from $207 to $211, mostly at $210, which is $3.00 higher than last week. Once the cash cattle market was able to secure another week of higher trade, the futures fully committed to trading higher and rounding out the week on a stronger note as well. December live cattle closed $0.37 higher at $133.52, February live cattle closed $0.45 higher at $137.70 and April live cattle closed $0.42 higher at $141.30. Friday's Cattle on Feed Report didn't do much of anything as placements were 2% higher than a year ago and on-feed numbers were fully steady. In the next COF report, it wouldn't be surprising to find the total on-feed number smaller as this month's marketings have been extremely aggressive and sooner or later the fact that the nation's been liquidating its cowherd will be evident in the report as well.
Friday's slaughter is estimated at 121,000 head -- 6,000 head more than a week ago and 5,000 head more than a year ago. Saturday's kill is projected to be around 69,000 head -- 11,000 head more than a week ago and 4,000 head less than a year ago. The week's total slaughter is estimated at 677,000 head -- 22,000 head more than a week ago and 11,000 head more than a year ago.
Boxed beef prices closed higher: choice up $2.25 ($278.41) and select up $0.67 ($263.83) with a movement of 103 loads (52.75 loads of choice, 28.71 loads of select, 9.82 loads of trim and 11.97 loads of ground beef). Throughout the week choice cuts averaged $279.67 (down $6.61 from last week) and select cuts averaged $264.98 (down $3.55 from last week) with a total movement of cuts, grinds and trim totaling 757 loads.
MONDAY'S CASH CATTLE CALL: Higher. With next week being a holiday week, it's hard telling how aggressive packers will be in the cash market. But with how current supplies are feedlots shouldn't struggle to sell cattle for more money.
FEEDER CATTLE:
After posting a monstrous rally ahead of Thursday's close, feeder cattle futures didn't do much of anything throughout Friday's trade even though the corn market closed lower and the live cattle contracts were able to close somewhat higher. Now with January as the spot contract for the feeder cattle market, the complex looks to 2022 with optimism and hopefulness. And even though the feeder cattle complex closed lower by Friday's end, it wasn't a bearish end to the week but rather a sign that traders had exhausted their efforts when they pushed the market $2.00 higher on Thursday. Heading into next week's trade, very few sale barns will have sales due to the Thanksgiving holiday. January feeders closed $0.45 lower at $160.92, March feeders closed $0.17 lower at $163.37 and April feeders closed $0.20 lower at $165.87. The Oklahoma Weekly Cattle Auction Summary shared that, compared to last week all throughout the state, feeder steers and heifers traded steady to $3.00 higher. Steer calves traded $4.00 higher and heifer calves traded steady to $3.00 higher. Wheat pasture is in pretty good shape, which helped boost demand for calves as it gives buyers another option as opposed to only having the feedlot to go to. The CME Feeder Cattle Index 11/18/2021: up $0.19, $155.65.
LEAN HOGS:
It was a wild week for pork cutout values, so Friday's close up $0.13 was rather refreshing. Even though pork cutouts closed somewhat higher, the lean hog complex continued to fight hesitancy in its nearby contracts; the deferred contracts rallied on throughout the day as they have throughout most of the week. December lean hogs closed $1.35 lower at $73.75, February lean hogs closed $0.82 lower at $82.47 and April lean hogs closed $0.25 lower at $87.35. Much of the hesitancy surrounding the nearby contracts is that, with the holidays quickly approaching, processing speeds are going to be cut back so workers can have time off and slower processing speeds don't bode well for a market that already has plenty of market-ready front-end supplies. But when looking ahead to 2022, optimism is built into the market already as traders hope greater export opportunities will surface as African swine fever continues to spread and that with Biden's proposal that would allow for faster processing in pork plants, producers may get to be current once again. Pork cutouts totaled 236.89 loads with 199.15 loads of pork cuts and 37.74 loads of trim. Pork cutout values: up $0.13, $89.82. Friday's slaughter is estimated at 479,000 head -- 1,000 head less than a week ago and 7,000 head less than a year ago. Saturday's kill is projected to be around 233,000 head -- 29,000 head less than a week ago and 51,000 head less than a year ago. Thursday's hog slaughter was revised to 475,000 head -- 6,000 head less than what was originally stated. The CME Lean Hog Index 11/17/2021: down $1.02, $75.26.
MONDAY'S CASH HOG CALL: Lower. With next week being a shortened holiday week, it's likely packers won't be aggressive in the cash market at all.
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