GENERAL COMMENTS:
The grain market's rally is putting a damper on cattle futures Friday and will likely lead to a weaker close by the day's end. The lean hog market was encouraged to see China in this week's export report, even though sales were lower than a week ago. December corn is up 7 cents per bushel and December soybean meal is up $13.80. The Dow Jones Industrial Average is up 173.81 points and NASDAQ is up 136.21 points.
LIVE CATTLE:
Even though the grain market rally shouldn't have a significant toll on the live cattle market given that fat cattle are at the end of their nutritional needs, when grain markets rally as much as they are Friday, it puts a damper on both the live and feeder cattle futures. December live cattle are down $0.22 at $131.65, February live cattle are down $0.82 at $135.57 and April live cattle are down $0.80 at $139.45. Boxed beef prices saw a little bit of pull back over the last two days, so it's encouraging for the market to have fully higher prices at midday. The market may have already found its top for the season, but sideways trade due to excellent demand and holiday buying should keep prices from drifting considerably lower any time soon. The cash cattle market is quiet Friday morning as packers seem to have filled their needs for the week. If any more trade does develop it will likely be just some clean-up deals here and there. Thus far throughout the week, Southern live cattle have traded from $131 to $132, mostly at $132 which is $3.00 higher than last week. Northern dressed cattle have traded from $205 to $207, but mostly at $207, which is $4.00 higher than a week ago.
Beef net export sales of 20,600 metric tons (mt) for 2021 were up 23% from the previous week and 39% from the prior four-week average. The three largest buyers were China (8,200 mt), Taiwan (4,300 mt) and Japan (2,200 mt).
Boxed beef prices are higher: choice up $0.04 ($285.18) and select up $2.08 ($269.37) with a movement of 63 loads (41.96 loads of choice, 13.12 loads of select, zero loads of trim and 8.00 loads of ground beef).
FEEDER CATTLE:
The feeder cattle market can't seem to catch a break as the corn market is determined to trade higher, which sends feeders into a tizzy time after time. With corn prices jumping a considerable 6 to 9 cents higher in the nearby contracts, buyers are once again having to look at the cost of feeding cattle and their end value and run the numbers. Thankfully the cash cattle market has also rallied over the last three weeks to give feeders some hope and to somewhat offset the burn of these higher feed prices. And the corn market isn't the only grain market rallying as soybean meal is going wild too with its $0.13 jump at midday. November feeders are down $1.30 at $156.02, January feeders are down $1.85 at $157.22 and March feeders are down $1.90 at $158.55.
LEAN HOGS:
Pork net export sales were lower for the week and lower than the four-week rolling average, but again China was one of the biggest buyers in this week's report. Even though sales were lower overall, the futures market is rallying upon seeing renewed support from China and from the market's uptick in pork cutouts. Pork cutout values continue to be a wild card, bouncing anywhere from the $90 to $100 range here as of late, and it's likely that the market continues to see this type of $4.00 lower one day, and $5.00 higher the next action as processing speeds remain in question, but holiday buying throws the market a bone here and there. December lean hogs are up $0.55 at $75.92, February lean hogs are up $1.22 at $80.30 and April lean hogs are up $1.20 at $85.02.
The projected CME Lean Hog Index for 11/11/2021 is down $1.27 at $76.68, and the actual index for 11/10/2021 is down $0.77 at $77.95. With Thursday's market having traded so light, there isn't a comparison to be made regarding morning cash hog prices on the National Direct Morning Hog Report. However, we do know 4,775 head have traded Friday morning, with a weighted average of $57.94, ranging from $55.00 to $60.00 and a five-day rolling average of $58.24. Pork cutouts total 256.45 loads with 241.32 loads of pork cuts and 15.13 loads of trim. Pork cutout values: up $5.42, $101.22.
Pork net export sales of 23,300 mt for 2021 were down 49% from the previous week and 28% from the prior four-week average. The three largest buyers were Mexico (7,800 mt), China (5,800 mt) and Japan (5,400 mt).
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