GENERAL COMMENTS:
Packers are fishing, seeing how eager feedlots are to sell cattle this week, as they've now offered steady "bait" bids in both Nebraska and Iowa. Cattle have yet to trade this week, and its likely feedlots will demand more money again, but time will tell. December corn is up 6 cents per bushel and December soybean meal is up $8.40. The Dow Jones Industrial Average is down 190.10 points and NASDAQ is down 44.44 points.
LIVE CATTLE
Packers have thrown out a 'bait bid' to see if any feedlots in Nebraska and Iowa will jump at steady money as they've offered $130 to $132 for live cattle and $207 for dressed cattle. Thankfully, with the recent rally that feedlots have been able to push, no one has jumped at steady money. The week's vigorous slaughter pace also tells feedlots that packers are still clipping through their inventory and are going to continue to need cattle, which may even mean they have to pay the piper again this week. It's also encouraging that the live cattle contracts are rallying into Wednesday afternoon, which will bring a little extra comfort to feedlots as they wait out higher offers. December live cattle are up $0.52 at $132.25, February live cattle are up $0.15 at $136.25 and April live cattle are up $0.37 at $140.17. It's likely that boxed beef prices will close lower again Wednesday afternoon as the seasonal high could already be in, but thankfully front-end supplies of cattle are current so there isn't a backlog to work through while prices look for a support point.
The Fed Cattle Exchange Auction listed a total of 1,973 head, of which 308 actually sold, none were scratched from the auction and 1,665 head were listed as unsold, as they did not meet the reserve prices, that ranged from $132 to $133. Opening prices ranged from $130 to $131, high bids ranged from $131 to $132.25. The state-by-state breakdown looks like this: Texas 1,468 total head, all of which went unsold; Nebraska 505 total head, with 308 head sold at $132, and 197 head went unsold.
Boxed beef prices are lower: choice down $3.52 ($278.61) and select down $1.04 ($265.55) with a movement of 82 loads (50.36 loads of choice, 16.04 loads of select, 3.84 loads of trim and 11.26 loads of ground beef).
FEEDER CATTLE
The feeder cattle contracts are annoyed with Wednesday's trade as they see the live cattle contracts rallying and bids starting to come from packers, but the corn market is rallying again which makes it difficult to trade higher as feed costs are a heightened concern. January feeders are down $0.32 at $158.95, March feeders are down $0.15 at $160.75 and April feeders are down $0.12 at $163.30. It's going to be difficult for the January feeder cattle contract to move much higher without a lower corn market and without a substantially higher live cattle market as the contract is looking at the resistance at $160 and will need unwavering support to break through that barrier. Thankfully demand in the countryside remains strong, but with the holidays quickly approaching, its normal for buyers to be aggressive in the week before a holiday and merely nonexistent through the holiday week itself.
LEAN HOGS
The lean hog market isn't trading fully higher as the nearby contracts of December 2021 and February 2022 are trading lower, but otherwise the market is keeping a modest rally through Wednesday's trade. The nearby contracts are struggling as it's hard to trend higher when cash prices are weaker, and pork cutout values are slowly waning lower. The support for the deferred contracts comes from the hope that processing plants will be able to run faster speeds, which should help work through front-end supplies. With African swine fever still spreading in parts of Europe, export opportunities may become ample in the future. December lean hogs are down $1.67 at $76.02, February lean hogs are down $0.35 at $83.05 and April lean hogs are up $0.12 at $87.50.
The projected lean hog index for 11/15/2021 is up $0.16 at $76.33, and the actual index for 11/12/2021 is down $0.51 at $76.17. Hog prices are lower on the National Direct Afternoon Hog Report, down $1.23 with a weighted average of $56.14, ranging from $53.00 to $57.00 on 4,124 head and a five-day rolling average of $57.36. Pork cutouts total 201.41 loads with 174.98 loads of pork cuts and 26.43 loads of trim. Pork cutout values: down $1.85, $85.92.
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