GENERAL COMMENTS:
It was a powerful day for the cattle markets as feeder cattle futures closed upward of $2.00 higher and feedlots once again pushed the cash cattle market higher. Pork cutouts jumped sharply higher and the lean hog contracts for 2022 closed higher even with China absent from the day's export report. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.20 with a weighted average of $55.10 on $5,797 head. December corn is down 2 1/4 cents per bushel and December soybean meal is down $4.30. The Dow Jones Industrial Average is down 60.10 points and NASDAQ is up 72.14 points.
LIVE CATTLE:
Live cattle futures were able to rally as the market secured another week of higher cash cattle trade as true price discovery has worked its way back into the market and feedlots have regained some much-deserved leverage. December live cattle closed $0.92 higher at $133.15, February live cattle closed $0.85 higher at $137.25 and April live cattle closed $0.60 higher at $140.87. There was a light to moderate trade reported throughout the countryside as Southern live cattle traded for $133 and a few up to $134, which is $1.00 to $2.00 higher than a week ago. Northern dressed cattle traded from $209 to $211, which is $3.00 higher than a week ago. As the market has secured cash cattle prices not seen since June 2017, feedlots are grinning ear to ear as they've finally been able to push the market and have been met with hungry buyers. There's nothing more beautiful than true competition in a marketplace and true price discovery. Thursday's slaughter is estimated at 122,000 head -- 5,000 head more than a week ago and 2,000 head more than a year ago.
Beef net sales of 25,500 metric tons (mt) for 2021 were up 23% from the previous week and 58% from the prior 4-week average. The three largest buyers were China (13,800 mt), Taiwan (3,600 mt) and Japan (3,200 mt).
Thursday's actual slaughter data for the week ended 11/6/2021 showed steers dropped one pound from the previous week to average 919 pounds and heifers stayed steady at 842 pounds.
Boxed beef prices closed lower: choice down $2.31 ($276.16) and select down $0.90 ($263.16) with a movement of 193 loads (117.07 loads of choice cuts, 25.22 loads of select, 7.33 loads of trim and 43.76 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady with the week's trend. With cattle having now traded in both the North and the South, prices will likely hold true to the week's trend.
FEEDER CATTLE:
Thankfully corn futures were lower throughout most of the day and feeder cattle futures were able to close sharply higher. January feeders closed $2.45 higher at $161.37, March feeders closed $2.45 higher at $163.55 and April feeders closed $2.35 higher at $166.07. The resistance at $160 didn't slow the feeder cattle contracts down one bit come Thursday as the market was excited to see fat cattle trade higher again and took the corn market's dismal day as it's glistening chance to rally. If the market breaks above $162 in the January contract, there's all the upward potential one could dream of for the market to take. The bigger question is: Will the market be able to keep all of the positioning that Thursday secured? At Southern Oklahoma Livestock Auction in Ada, Oklahoma, compared to last week steer calves traded $2.00 to $8.00 higher, with instances of up to $15.00 higher. Feeder steers were lightly tested and traded unevenly steady. Heifer calves traded mostly steady and feeder heifers weren't tested well enough to establish a trend. The CME Feeder Cattle Index 11/17/2021: down $0.02, $155.46.
LEAN HOGS:
Lean hog futures had a respectable day, closing modestly higher in all the 2022 contracts. The wild poker game of guessing what the pork cutout value will do continues as the midday report printed cutouts up $12.58 and afternoon prices jumped $5.17 higher. I didn't think the afternoon prices would be up a whopping $12.00, but I was still surprised to see them up even $5.00 higher. But with the volatile marketplace that comes with today's market and the heightened demand thanks to the holidays, anything is possible. December lean hogs closed $1.07 lower at $75.10, February lean hogs closed $0.15 higher at $83.30 and April lean hogs closed $0.07 higher at $87.60. Pork cutouts totaled 370.81 loads with 328.50 loads of pork cuts and 42.32 loads of trim. Pork cutout values: up $5.17, $89.69. Thursday's slaughter is estimated at 481,000 head -- 32,000 head more than a week ago and 6,000 head less than a year ago. The CME Lean Hog Index 11/16/2021: down $0.05, $76.28.
Pork net sales of 25,000 mt for 2021 were up 7% from the previous week but down 16% from the prior 4-week average. The three largest buyers were Mexico (16,900 mt), Japan (3,800 mt) and Canada (1,600 mt).
Thursday's actual slaughter data for the week ended 11/6/2021 showed live hog weights gained a pound from the week before to average 290 pounds, and dressed weights gained a pound as well to average 216 pounds.
FRIDAY'S CASH HOG CALL: Lower. Heading into the weekend before a shortened holiday week, packers will likely only pick up the few hogs they need and call it a day.
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