GENERAL COMMENTS:
Wednesday's trade was significant for the market even though it didn't necessarily mean that the futures contracts shot sharply higher. The announcement that the Biden administration may allow for some pork plants to run faster chain speeds could be extremely positive if plants are indeed able to do so, and whenever the cash cattle market can rally it's a positive signal for the markets. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.57 with a weighted average of $58.09 on 5,052 head. December corn is up 14 1/2 cents per bushel and December soybean meal is down $0.10. The Dow Jones Industrial Average is down 240.04 points and NASDAQ is down 263.84 points.
LIVE CATTLE:
Wednesday comes as another glorious day for the cattle market as the cash cattle market was able to see cattle trade higher again. There was a light movement that developed around the noon hour when Southern live cattle traded for mostly $131 to $132, which is $3.00 higher than last week, and Northern dressed cattle traded for $205 to $207, mostly at $207, which is $4.00 stronger than last week. Even though the futures market was skeptical in whether the complex should trade higher alongside the cash market's rally, the market's overall morale is still strong and it's likely that traders come around to trading higher before the week's end. December live cattle closed $0.20 lower at $132.00, February live cattle closed $0.12 higher at $136.82 and April live cattle closed $0.07 higher at $140.32. Wednesday's slaughter is estimated at 122,000 head, steady with a week ago and 8,000 head more than a year ago. Looking ahead to Thursday's trade, it will be interesting to see where carcass weights fall on the market's actual slaughter data. Lighter ascending weights will bode well for the industry.
Boxed beef prices closed lower: choice down $2.28 ($285.52) and select down $4.00 ($266.62) with a movement of 195 loads (119.39 loads of choice, 33.08 loads of select, 14.12 loads of trim and 28.31 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady with the week's trend. Seeing that cattle have traded in both the North and the South, the rest of the week's business is likely to follow suit.
FEEDER CATTLE:
The feeder cattle contracts had a rough day as the corn market continued its rally and closed $0.13 to $0.14 higher in the nearby contracts. The market would like to rally given the advancements that the cash cattle market made, but in the meantime, traders are fixated on the corn market and don't seem comfortable rallying the feeder complex until they understand just how much upside potential there is in the corn market.
November feeders closed $1.25 lower at $156.65, January feeders closed $1.75 lower at $158.05 and March feeders closed $1.45 lower at $159.57. At Ozarks Regional Stockyards in West Plains, Missouri, compared to last week, steer calves traded $4.00 to $8.00 higher while heifer calves traded $2.00 to $6.00 higher. The market only had a handful of yearlings to market, but they were met with strong demand as they sold on average $4.00 higher. The CME Feeder Cattle Complex for Nov. 9: up $0.12, $154.98.
LEAN HOGS:
The lean hog market's modest rally came as the market caught wind that the Biden administration is considering a proposal that would allow for some processing plants to slaughter more pigs if they increase their staff. This is invigorating news to the market as the mandated slow processing speeds has cost producers exponentially, and this could help producers regain some market leverage. There are still a lot of unknowns about the proposal and it's unlikely that any plants will be given the go-ahead to increase their chain speeds before the end of the year, but this certain bodes well for 2022's market trajectory. December lean hogs closed $0.75 higher at $75.70, February lean hogs closed $0.57 higher at $79.32 and April lean hogs closed $0.60 higher at $84.15. Fundamentally, the lean hog market didn't gain much support from Wednesday's trade as pork cutout values closed lower and the cash market was wimpy as packers just barely over 5,000 head. Pork cutouts totaled 347.47 loads with 309.45 loads of pork cuts and 37.89 loads of trim. Pork cutout values: down $1.98, $90.57. Wednesday's slaughter is estimated at 478,000 head, 5,000 head more than a week ago and 24,000 head more than a year ago. The CME Lean Hog Index for Nov. 8: down $0.06, $79.23.
THURSDAY'S CASH HOG CALL: Lower. With packers showing little aggression in Wednesday's market, and with pork cutouts weaker it's likely that the market isn't aggressively sought after in Thursday's trade either.
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