GENERAL COMMENTS:
It's another hot day for the cattle contracts as both the live and feeder cattle markets are rallying into Tuesday afternoon. There have been a few cash cattle bids offered but as the market looks as the steady bids, feedlots have let them sit cold as they want higher prices again this week. December corn is up 1 cent per bushel and December soybean meal is down $6.50. The Dow Jones Industrial Average is up 40.79 points and NASDAQ is down 157.04 points.
LIVE CATTLE:
The cattle market is hungry for another lively rally and given how interested traders seem in supporting the movement, it's very likely that both the cash market and futures market will trade higher again by the end of the week. With the board posting a modest rally, feedlots are looking at the market from all angles and can't help but feel strong in their aspirations for higher cash trade. There have been a few bids drift into the market at $210 in western Iowa and $135 in Kansas. But at this point those bids at steady money aren't getting packers anywhere. It's undeniable that the holiday week will cut processing speeds. But as feedlots look at their showlists they aren't too concerned as they sit extremely current with the supplies of market-ready cattle. Feedlots aren't likely to take the market's offer of steady bids and it will likely take $1.00 if not $2.00 higher to move cattle this week. Trade will likely wait to develop until Wednesday. December live cattle are up $0.97 at $135.40, February live cattle are up $0.60 at $139.55 and April live cattle are up $0.65 at $142.92.
Boxed beef prices are mixed: choice down $0.15 ($279.10) and select up $1.36 ($265.09) with a movement of 69 loads (40.25 loads of choice, 12.50 loads of select, 5.69 loads of trim and 10.15 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures aren't being shy Tuesday as the complex sets out to rally with support being fueled from the excited live cattle market and the relatively quiet corn complex. January feeders are up $2.87 at $164.62, March feeders are up $1.80 at $165.90 and April feeders are up $1.55 at $168.25. One may feel skeptical about the rally that's igniting the feeder cattle complex as some may worry it's just a holiday fluke and the market really isn't that robust. But when you look at the market from both a technical and fundamental stance, the support is fully there for the market to soar higher. Technically speaking, the market has all the upward potential it could ever dream of as resistance is far out and traders seem interested. And, fundamentally, with the mass liquidation that's happened throughout the western U.S., feedlots and packers both know supplies of calves are going to be harder to come by in the years ahead.
LEAN HOGS:
Tuesday hasn't been as friendly to the hog market as Monday was as the complex is seeing lower waning prices all across the market -- pork cutouts are lower, cash prices are lower and the futures market is trading mostly lower. December lean hogs are down $0.67 at $73.97, February lean hogs are up $0.02 at $83.05 and April lean hogs are down $0.07 at $87.67. The regression in prices isn't shocking as the market had to absorb the fact that with it being a holiday week, packers are going to run slower processing speeds which will back up front-end supplies of hogs; this negatively affects an already sorry cash market. A dismal outlook is likely the market's fate throughout the rest of the week as the holiday pulls traders away from the board and slows production down throughout the countryside.
The projected CME Lean Hog Index for 11/22/2021 is up $0.27 at $73.15, and the actual index for 11/19/2021 is down $0.58 at $72.88. Hog prices are lower on the National Direct Morning Hog Report, down $0.11 with a weighted average of $54.79, ranging from $54.00 to $55.00 on 4,367 head and a five-day rolling average of $55.14. Pork cutouts total 150.53 loads with 122.54 loads of pork cuts and 27.99 loads of trim. Pork cutout values: down $0.34, $85.91.
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