GENERAL COMMENTS:
It was a lackadaisical day for the livestock contracts as not a lot rattled the market in either direction. Looking ahead to Monday, feedlots will be taking a through inventory of their pens and hoping that packers are aggressive in next week's market again. Hog prices closed $3.93 higher on the National Direct Afternoon Hog Report, equating to a weighted average of $61.80 on 12,294 head. March corn is up 7 1/4 cents per bushel and January soybean meal is up $9.80. The Dow Jones Industrial Average is down 59.71 points and NASDAQ is down 295.85 points.
From Friday to Friday, livestock futures scored the following changes: December live cattle down $0.42, February live cattle down $2.25; January feeder cattle down $3.03, March feeder cattle down $0.88; December lean hogs up $0.80, February lean hogs up $0.47.
LIVE CATTLE:
It was an uneventful day for the live cattle contracts as the market traded modestly lower into Friday's close and the cash cattle market was already done with the majority of its business by Friday's arrival. December live cattle closed $0.02 higher at $137.67, February live cattle closed $0.62 lower at $138.95 and April live cattle closed $0.45 lower at $142.15. Throughout the week Northern dressed cattle traded for mostly $220, which is $3.00 higher than a week ago, and Southern live cattle traded for mostly $142, which is also $3.00 higher than a week ago. The market will anxiously be waiting for Monday's report to show which delivery option packers committed the cattle they bought this week for. If they happened to commit a large percentage of them to the nearby delivery, feedlots will continue to sit in the driver's seat of the current cash cattle market.
Friday's slaughter is estimated at 119,000 head, steady with a week ago and 1,000 head more than a year ago. Saturday's kill is projected to be around 69,000 head.
Boxed beef prices closed higher: choice up $2.34 ($274.36) and select up $0.39 ($258.64) with a movement of 117 loads (80.54 loads of choice, 13.50 loads of select, 10.62 loads of trim and 12.03 loads of ground beef). Throughout the week choice cuts averaged $273.17 (down $6.08 from last week) and select cuts averaged $259.43 (down $3.60 from last week) and the week's total movement of cuts, grinds and trim totaled 798 loads.
MONDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. With how aggressive packers have been processing cattle, it's likely that they could be aggressive in the cash market again next week.
FEEDER CATTLE:
With the corn market sporting a fancy $0.07 to $0.09 gain in its nearby contracts, feeders didn't have much option in rounding out the week lower. January feeders closed $1.65 lower at $164.12, March feeders closed $1.22 lower at $167.10 and April feeders closed $1.05 lower at $169.85. By and large, the feeder cattle contracts chopped sideways as the market tried to grab hold to the momentum that's rallying the live cattle market and flourish on the strong demand that feeders and calves are seeing in the sale barns, all while offsetting the worries of drought conditions and higher input cost. The Oklahoma Weekly Cattle Auction Summary shared that, throughout the week, compared to last week's market, feeder steers and heifers sold mostly steady. Steer and heifer calves traded $4.00 to $8.00 higher, while the 500- to 600-pound calves traded steady. The boost in slaughter cattle prices along with the ability to clear out inventory and make room for more cattle has helped elevate the feeder cattle market. Demand for light weight calves is extremely good despite the dry conditions across much of the nation. There are only two weeks left between now and Christmas week, and the sales leading up to the holiday are expected to be large. Slaughter cows traded $4.00 to $5.00 higher and slaughter bulls traded $2.00 to $3.00 higher. The CME Feeder Cattle Index for Dec. 2: up $0.24, $161.58.
LEAN HOGS:
Leading up to the holidays, packers haven't squandered their opportunity to buy more hogs this past week as they dove aggressively into the cash hog market. Even with the pork cutout value taking a royal beating come Friday's close (down $6.72) packers still bought over 12,000 head in the cash market by Friday's close and don't intend to get caught short on supplies any time soon. Their aggressive behavior in the cash market could stem from them anticipating hog supplies to wane in 2022 or they could be anticipating greater pork demand in the near future. December lean hogs closed $0.40 lower at $74.00, February lean hogs closed $0.50 lower at $81.50 and April lean hogs closed $0.45 lower at $85.87. Unfortunately, until the holidays pass, seeing volatile swings in pork cutout values is expected. Pork cutouts total 342.15 loads with 306.36 loads of pork cuts and 35.79 loads of trim. Pork cutout values: down $6.72, $81.37. Friday's slaughter is estimated at 479,000 head, 9,000 head more than a week ago and 12,000 head less than a year ago. Saturday's kill is projected around 265,000 head. The CME Lean Hog Index for Dec. 1: up $0.59, $70.86.
MONDAY'S CASH HOG CALL: Steady. Packers could very well come out in Monday's trade and chase after the hog market, or they could do the opposite as they were aggressive this past week. Time will tell and the fickle nature of the hog market is a troubling one to predict for the time being.
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