GENERAL COMMENTS:
Cattle futures are struggling to find momentum in Wednesday's trade as the feeder cattle contracts can't peel their eyes away from the corn market's 12- to 14-cent rally and the live cattle contracts have yet to absorb that cash cattle are trading higher again this week. The lean hog futures are the most ambitious of the bunch, posting a modest rally and desperate to keep the market's mixed tone more positive than negative. December corn is up 14 cents per bushel and December soybean meal is down $0.20. The Dow Jones Industrial Average is down 70.67 points and NASDAQ is down 99.68 points.
LIVE CATTLE:
As the noon hour rolls around, packers have tipped their hand again and have begun to pick up cattle in Kansas, Nebraska and Texas -- all for higher prices! A light trade has developed in the South at $132, which is $3.00 higher than last week's average. Northern cattle have lightly tested the market at $207, which is $4.00 higher than last week's average. The cash cattle market hasn't seen a significant number of cattle trades, but it's more likely than not these prices will hold and become the week's trend. The higher surge in cash prices should help bolster live cattle future's morale and encourage higher trade as traders see the market's fundamentals are indeed supportive of this rally continuing. December live cattle are down $0.12 at $132.07, February live cattle are up $0.10 at $136.80 and April live cattle are down $0.07 at $140.17.
The Fed Cattle Exchange Auction listed a total of 1,866 head, of which 741 actually sold, none were scratched from the auction and 1,125 head were listed as unsold, as they did not meet the reserve prices, which ranged from $124 to $132. Opening prices ranged from $123 to $129, high bids ranged from $123 to $131. The state-by-state breakdown looks like this: Texas 1,618 total head, with 741 head sold at $131, 877 head went unsold; Kansas 176 total head, all of which went unsold; California 72 total head, all of which went unsold.
Boxed beef prices are lower: choice down $0.09 ($287.71) and select down $3.18 ($267.44) with a movement of $124 loads (76.02 loads of choice, 21.55 loads of select, 5.53 loads of trim and 21.28 loads of ground beef).
FEEDER CATTLE:
With the nearby corn contracts posting a sporty 12-cent rally, it comes as no surprise that feeder cattle futures are seeing significant losses all throughout the market, but especially in their nearby contracts. November feeders are down $1.45 at $156.45, January feeders are down $1.42 at $158.37 and March feeders are down $1.27 at $159.75. The market's drop solely stems from the fact the corn market is rallying and higher input costs are always worrisome for feeders. The demand for calves and feeders throughout the countryside still remains strong as buyers recognize the merit in the corn market's rally. But they also see the upside potential the cattle market has in 2022 with few supplies reaping greater profits.
LEAN HOGS:
Lean hog futures closed lower Tuesday afternoon but are now eager to test the market's willingness to trade higher. December lean hogs are up $0.42 at $75.37, February lean hogs are up $0.47 at $79.22 and April lean hogs are up $0.32 at $83.85. With packers unable to push processing speeds faster, pork prices have seen heightened demand with the market seeing pre-holiday buying and plenty of consumer interest at local grocery stores. At midday the ham was once again the cut that saw the biggest advancement (up $11.93, $77.46), but a lot can change before the day's end so be looking for the afternoon report before drawing too many conclusions.
The projected CME Lean Hog Index for 11/8/2021 is down $0.06 at $79.23, and the actual index for 11/5/2021 is up $0.60 at $79.29. Hog prices are lower on the National Direct Morning Hog Report, down $0.01 with a weighted average of $58.04, ranging from $55.00 to $60.00 on 4,375 head and a five-day rolling average of $58.63. Pork cutouts total 195.30 loads with 173.09 loads of pork cuts and 22.21 loads of trim. Pork cutout values: up $1.51, $94.06.
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