GENERAL COMMENTS:
Monday came with the rallying support that last week carried and helped push the cattle contracts higher again. Meanwhile, the lean hog market closed with weaker undertones fundamentally while the futures market trended sideways. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.87 with a weighted average of $59.03 on 6,744 head. December corn is down 1 1/2 cents per bushel and December soybean meal is down $0.90. The Dow Jones Industrial Average is up 104.27 points and NASDAQ is up 10.77 points.
LIVE CATTLE:
The momentum in the live cattle market keeps reaching for more. We knew that, with the price advancement seen in last week's cash market, feedlots came out of the week with a win, but last week's trade got even sweeter when Monday's report came out and we saw that 90% of the cattle purchased last week are committed for the nearby delivery. Upon seeing that most of the cattle bought last week are committed for nearby delivery, feedlots knew they stood a chance at rallying the market again this week as packers are unarguably short bought. Monday's trade was mostly quiet without any significant trade taking place. It's likely that feedlots will be willing to wait until Friday again this week to get the prices they seek. Asking prices in the South have been noted at $132 to $134, but the North has yet to disclose what they're asking. Monday's slaughter is estimated at 121,000 head, steady with a week ago and 3,000 head more than a year ago.
Last week's negotiated cash cattle traded totaled 96,867 head. Of that, 90% (87,369 head) were scheduled for the nearby delivery, while the remaining 10% (9,498 head) were scheduled for the deferred delivery in the following 15 to 30 days.
Boxed beef prices closed mixed: choice down $0.89 ($288.65) and select up $1.08 ($268.60) with a movement of 103 loads (49.77 loads of choice, 24.97 loads of select, 14.99 loads of trim and 13.11 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: $2.00 to $4.00 higher. The market shouldn't struggle to attain higher prices again this week. Boxed beef prices closed mixed Monday afternoon, but holiday buying should support the market through at least mid-December. Slaughter speeds are right in line with where they were a week ago and the futures market doesn't have any immediate resistance to be in fear of.
FEEDER CATTLE:
The feeder cattle complex was fueled by the rally that's beating louder and louder in the live cattle contracts and thankful to see the corn market's weaker close once again. The spot November contract only has 10 days before it expires, so as traders begin to leave that contract and take position in another month, the contract is facing downward pressure. With the January 2022 contract now holding most of the market's attention, the complex sits comfortably having plenty of upward potential until $162 where resistance looms. November feeder cattle closed $0.30 lower at $158.57, January feeders closed $0.70 higher at $160.30 and March feeders closed $0.62 higher at $161.40. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, at the midsession point, feeder steers and heifers were trading $5.00 to $7.00 higher, steers calves were trading $7.00 to $10.00 higher and heifers calves were trading unevenly steady. The CME Feeder Cattle Index for Nov. 5: down $0.65, $154.62.
LEAN HOGS:
The saga of trying to pinpoint where the lean hog market is headed continues. The futures market chopped mostly sideways, not doing much of anything through Monday's trade, pork cutouts closed lower and cash hogs closed lower with only a few being traded in the cash market. December lean hogs closed $0.17 lower at $76.37, February lean hogs closed $0.10 lower at $79.37 and April lean hogs closed $0.17 higher at $84.02. By and large, the sideways chop is where the market will most likely continue to trade in the near future. Pork cutouts will most likely see days of both higher and lower prices as the holidays bring wild price swings and heightened demand for a short while. The wildcard in the pork market continues to be China and long-term demand. Pork cutouts total 337.09 loads with 304.17 loads of pork cuts and 32.92 loads of trim. Pork cutout values: down $1.49, $94.86. Monday's slaughter is estimated at 477,000 head, 5,000 head more than a week ago and 14,000 head less than a year ago. The CME Lean Hog Index for Nov. 4: up $0.37, $78.69.
TUESDAY'S CASH HOG CALL: Steady to somewhat lower. Monday's cash market wasn't anything out of the ordinary. Heading into the middle of the week, packers may show a little more aggression in the market as the week in now fully underway but seeing the cash market rally exponentially isn't extremely likely as there are plenty of hogs in the countryside and processing speeds aren't running at record speeds.
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