GENERAL COMMENTS:
Even though it was a holiday week where little is expected to take place, as sale barns are mostly closed for the week, traders tend to take a couple extra days off and no one is as attune to the markets as usual, but this week was as busy as ever. The fat cattle market rallied up to $140 live, the cattle contracts saw huge gains and, come Friday, there was news that a new COVID-19 variant had been found in South Africa. Come next week, the market will have a lot to absorb and rationalize. Hog prices closed $0.53 lower on the National Direct Afternoon Hog Report, posting a weighted average of $55.13 on 5,715 head. December corn is up 7 cents per bushel and January soybean meal is down $1.50. The Dow Jones Industrial Average is down 905.04 points and NASDAQ is down 353.56 points.
Friday to Friday livestock contracts scored the following changes: December live cattle up $4.57, February live cattle up $3.50; January feeder cattle up $6.22, March feeder cattle up $4.60; December lean hogs down $0.55, February lean hogs down $1.45.
LIVE CATTLE:
Despite the rest of the futures complex crumbling before Friday's eyes, the live cattle market continued to trade in its bullish fashion and seemed unbothered by the world's chaos. December live cattle closed $0.20 higher at $138.10, February live cattle closed $0.32 higher at $141.20 and April live cattle closed $0.05 lower at $143.85. All in all, Friday's trade was quiet throughout the live cattle sector, as the live cattle contracts paid no attention to the rest of the market's buzz, and the week's cash cattle business was essentially already done with. Heading into next week, the market will most likely be quiet until Monday when all can see how packers committed the cattle, they bought this week. Obviously, feedlots hope that packers are still committing a large portion of their needs to the nearby delivery so that they are forced into supporting the cash cattle market in the weeks to come. Throughout the week live cattle traded in the Southern Plains for $138 to $140 and Northern dressed cattle sold for $217 to $220. Of the cattle that sold for $220, some were bought with time, with delivery for the week of Dec. 6.
Thursday's slaughter is estimated at 1,000 head. Friday's slaughter is estimated at 119,000 head, 2,000 head less than a week ago and 7,000 head more than a year ago. Saturday's kill is projected to be around 81,000 head.
The week's actual slaughter data shared surprising data concerning carcass weights as both steer and heifers saw an increase from the previous week. Steers averaged 924 pounds (up 5 pounds from the previous week) and heifers average 844 pounds (up 2 pounds from the previous week).
Beef net sales of 19,300 mt for 2021 were down 24% from the previous week and 6% from the prior four-week average. The three largest buyers were South Korea (4,600 mt), China (4,400 mt) and Canada (2,800 mt).
Boxed beef prices closed mixed: choice up $0.90 ($280.01) and select down $1.19 ($262.28) with a movement of 50 loads (19.79 loads of choice, 8.56 loads of select, 12.19 loads of trim and 9.82 loads of ground beef).
MONDAY'S CASH CATTLE CALL: $1.00 higher. Even though the cash cattle market has been on fire and feedlots have been able to regain some much-needed leverage, I believe this market is going to see more upside in the near future, as fact stands that the nation's cowherd is dwindling, which should spark greater competition for cattle all the way through the feedlot.
FEEDER CATTLE:
Even though the corn market posted a $0.05 to $0.07 rally in its nearby contracts, the feeder cattle complex didn't seem to mind as the contracts closed mostly higher. January feeders closed $0.22 higher at $167.15, March feeders closed $0.07 higher at $167.97 and April feeders closed $0.07 higher at $169.87. With the feeder cattle contracts having all the upside potential from a technical standpoint and getting the green light from a fundamental basis with the cash cattle market seeing immense support and buyers aggressive in sale barns, cow-calf producers that still have calves to sell are beaming as the market is picking up more steam. The CME Feeder Cattle Index for Nov. 24: down $0.35, $157.48.
LEAN HOGS:
The lean hog market struggled throughout Friday's trade as initially it was only the deferred contracts that were trading lower, but by the day's end, the complex closed sharply lower. December lean hogs closed $2.22 lower at $73.20, February lean hogs closed $3.22 lower at $81.02 and April lean hogs closed $2.65 lower at $85.40. By and large it would appear that the news of the new COVID-19 variant carried a heavy toll on the market, which makes sense given that any supply chain hinderances doesn't bode well for the complex. Labor has been an immense issue for packing plants over the last year and half and new hurdles for the market aren't what anyone's glad to see. Pork cutouts totaled 201.17 loads with 175.06 loads of pork cuts and 26.11 loads of trim. Pork cutout values: down $1.00, $83.98. Thursday's slaughter is estimate at 2,000 head. Friday's slaughter is estimated at 470,000 head, 3,000 head less than a week ago and year ago. Saturday's kill is projected at 363,000 head. The CME Lean Hog Index for Nov. 23: down $0.59, $72.56.
Pork net sales of 17,500 mt for 2021 were down 30% from the previous week and 43% from the prior four-week average. The three largest buyers were Mexico (11,300 mt), Japan (2,400 mt) and South Korea (1,600 mt).
Actual slaughter data for the week ending Nov. 13 shared that live hog weights averaged 291 pounds (up 1 pound from the previous week) and dressed hog weights averaged 217 pounds (up one pound).
MONDAY'S CASH HOG CALL: Steady. This past week the cash hog market did well in regards to the total volume of hogs purchased, but the cash packers could be less aggressive in next week's market.
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