GENERAL COMMENTS:
The livestock contracts traded aggressively throughout Monday's trade as traders were willing to support the contracts and did so with ease. Heading into Tuesday's trade, the market will be watching for any packer interest that develops throughout the cash market as feedlots plan to get higher prices again this week. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.04 with a weighted average of $54.91 on 8,882 head. December corn is up 6 cents per bushel, and December soybean meal is down $1.80. The Dow Jones Industrial Average is up 17.27 points, and the NASDAQ is down 202.68 points.
LIVE CATTLE:
The live cattle market jumped to Monday's arrival and set out for higher trade early in the day. December live cattle closed $0.90 higher at $134.42, February live cattle closed $1.27 higher at $138.97 and April live cattle closed $0.97 higher at $142.27. The market is eager to continue to trade higher, and with the recent momentum that's been building in the cash market, traders see all the support they need to push the market higher technically. Monday's trade didn't see any interest from packers, but interest could start to develop as early as Tuesday but may be delayed until Wednesday. Southern asking prices are noted at $136 or more, and the North has yet to disclose where their initial asking prices sit at. Feedlots should have no problem getting packers to pay $1 to $2 more this week as they're seeing plenty of demand in the market and still are close to the knife in their committed supplies.
Monday's slaughter is estimated at 122,000 head -- 1,000 head more than a week ago and 2,000 head more than a year ago. Monday's cold storage report shared that the total pounds of beef in freezers was up 9% from last month but down 5% from a year ago.
Last week's negotiated cash cattle trade totaled 116,750 head, of which 75% (88,005 head) were committed for the nearby delivery, while the remaining 25% were committed for the deferred delivery.
Boxed beef prices closed mixed: choice up $0.84 ($279.25) and select down $0.10 ($263.73) with a movement of 124 loads (67.61 loads of choice, 37.26 loads of select, 8.82 loads of trim and 10.19 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: $1 to $2 higher. Even though packers have been buying ample supplies of cattle through the cash market, their processing speeds have been aggressive enough to demand that they keep buying more cattle.
FEEDER CATTLE:
Even though the corn market closed $0.06 to $0.07 higher, the feeder cattle contracts kept rallying throughout the day as the market felt fully supported by the momentum that's driving the live cattle complex higher. January feeders closed $0.077 higher at $161.70, March feeders closed $0.72 higher at $164.10 and April feeders closed $0.82 higher at $166.70. Even though Monday's market didn't seem phased by the corn market's rally, the complex will need to keep an eye on the rising cost of inputs. There are some feeder cattle sales early this week but, by and large, the market won't see many sales after Tuesday as most sale barns are taking the week off for the Thanksgiving holiday. At the session's midpoint, at Joplin Regional Stockyards in Carthage, Missouri, compared to last week, both feeder steers and heifers were trading $2 to $5 higher. The CME feeder cattle index 11/19/2021: up $0.64, $156.29.
LEAN HOGS:
The lean hog market rallied modestly all throughout the day, not paying any attention to the lower-trending cash and pork cutout markets. The market seemed to weather the blows of the day's weaker fundamentals, as the cold storage report was rather bullish for the hog market. Monday's Cold Storage Report shared that frozen pork supplies were down 6% from the previous month and down 2% from a year ago, and that stocks of pork bellies were down 10% from last month, but down 39% from last year. December lean hogs closed $0.90 higher at $74.65, February lean hogs closed $0.55 higher at $83.02 and April lean hogs closed $0.40 higher at $87.75. Even though cash prices were slightly lower, they did step up and buy a considerable volume in the cash hog market (it seems silly to say 8,000 head is a significant volume, but the cash hog market is what it is), which likely means they won't be as aggressive in the market in the days ahead. It's not surprising to see this type of buying happening in the market as buyers want to get their business done for the week and take advantage of the shortened holiday week. Pork cutouts totaled 384.89 loads with 343.33 loads of pork cuts and 41.55 loads of trim. Pork cutout values: down $3.57, $86.25. Monday's slaughter is estimated at 480,000 head -- steady with a week ago and 21,000 head less than a year ago. The CME lean hog index 11/18/2021: down $1.80, $73.46.
TUESDAY'S CASH HOG CALL: Lower. The shortened holiday weeks always throw a kink into the markets as packers are fickle during these times. But with processing speeds slower this week as workers need time off for the holiday, it's unlikely packers are very aggressive in the cash market in the days leading up to the holiday.
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