GENERAL COMMENTS:
Lean hog futures rallied on the thought there may be export opportunities to come, while live cattle futures skipped sideways through the day. Feeder cattle futures rallied modestly on weaker corn prices. Cash cattle trade could begin to be tested come Wednesday. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.30 with a weighted average of $57.16 on 11,614 head. December corn is down 5 1/2 cents per bushel and December soybean meal is down $4.20. The Dow Jones Industrial Average is up 56.35 points and NASDAQ is up 120.01 points.
LIVE CATTLE:
Live cattle futures had a tough time getting traders to commit to much of anything as they traded sideways throughout Tuesday. The nearby contracts were mildly lower and the summer 2022 contracts were mildly higher. The market is looking for some fundamental support to boost a higher movement on the board. If the cash cattle market can champion another week of higher prices (which is fully expected) and we can process close to 650,000 head again this week, the board should feel comfortable rallying. There was a little bit of cash cattle trade in the North, but there wasn't a strong enough test to say any sort of trend is set for the week. Trade is unlikely to occur until after the Fed Cattle Exchange at the earliest. Asking prices in the South are noted at $134-plus and the North hasn't set their prices yet. December live cattle closed $0.05 lower at $131.72, February live cattle closed $0.22 lower at $136.10 and April live cattle closed $0.17 lower at $139.80. Tuesday's slaughter is estimated at 122,000 head -- steady with a week ago and 2,000 head more than a year ago.
The special Fed Cattle Exchange Auction on Tuesday listed a total of 2,261 head, of which 607 actually sold, none were scratched from the auction and 1,654 head were listed as unsold, as they did not meet the reserve prices, which ranged from $132 to $133. Opening prices ranged from $130 to $131, high bids ranged from $131 to $132.50. The state-by-state breakdown looks like this: Texas 1,840 total head, with 186 head sold at $132.50, 1,654 head went unsold; Kansas 421 total head, with all 421 head sold at $132 to $132.25.
Boxed beef prices closed lower: choice down $1.07 ($282.13) and select down $0.69 ($266.59) with a movement of 162 loads (87.24 loads of choice, 34.30 loads of select, 7.24 loads of trim and 32.77 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. The market stands an excellent chance of pushing the cash cattle market higher again this week as packers are close to the knife and running speedy kill schedules.
FEEDER CATTLE:
As the corn market closed 5 to 6 cents lower, feeder cattle futures had enough gumption to push higher and even closed over $1.00 stronger in the early 2022 contracts. January feeders closed $0.80 higher at $159.27, March feeders closed $1.02 higher at $160.90 and April feeders closed $1.10 higher at $163.42. With the fat cattle market expected to have a strong spring this upcoming year, so long as the corn market doesn't jump much higher, the fat cattle market's momentum could carry feeders higher as limited supplies should help boost prices for both the fat cattle and feeder cattle markets. At the midpoint session at Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week feeder steers sold steady to $3.00 higher, and heifers traded steady to $2.00 lower. Both steer and heifer calves traded steady to $3.00 higher with ample demand. The CME Feeder Cattle Index 11/15/2021: unavailable at this time.
LEAN HOGS:
With chatter engulfing the market that African swine fever is expected to keep moving further west in Europe, the lean hog contracts rallied, hoping, and praying that the U.S. market will find more demand and keep the virus off our homeland. Unfortunately, the virus is expected to find its way into France and Luxembourg as wild boars run through the territory and have proven to be transmitters of the virus. Even though pork cutouts closed lower, the lean hog market shot higher in hopes of finding more demand in time. The cash hog market closed lower but it was encouraging to see how aggressive packers were in the cash market as they bought over 11,000 head. If Thursday's export report can unveil positive news (whether that be from China buying or a large volume of pork moved) then the market stands a chance at keeping this rally as traders are chomping at the bit to push it higher. December lean hogs closed $1.92 higher at $77.72, February lean hogs closed $2.20 higher at $83.37 and April lean hogs closed $1.67 higher at $87.37. Pork cutouts totaled 206.48 loads with 187.18 loads of pork cuts and 19.30 loads of trim. Pork cutout values: down $1.47, $92.46. Tuesday's slaughter is estimated at 484,000 head -- 6,000 head more than a week ago and 12,000 head less than year ago. Monday's slaughter was revised to 480,000 head, which is 6,000 head less than what was originally stated. The CME Lean Hog Index 11/12/2021: down $0.51, $76.17.
WENDESDAY'S CASH HOG CALL: Lower and on a smaller test. With packers being aggressive in Tuesday's market, it's unlikely they are as aggressive in Wednesday's trade unless they are buying heavily this week and plan to be merely nonexistent in the market next week as the week will be short for Thanksgiving.
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