GENERAL COMMENTS:
It was a good day for the entire livestock complex as the live cattle, feeder cattle and lean hog markets all got to round out the week higher. The lean hog market saw the most action throughout Friday's trade and the complex couldn't be any more excited for the 2021 year to be almost over and for 2022 to be nearing as hog producers are banking on a stronger market in 2022. Hog prices closed lower on the National Direct Afternoon Hog Report, down $2.77 with a weighted average of $57.69. March corn is down 1 3/4 cents per bushel and January soybean meal is steady. The Dow Jones Industrial Average is up 216.30 points and NASDAQ is up 113.23 points.
From Friday to Friday, livestock futures scored the following changes: December live cattle down $0.83, February live cattle down $0.87; January feeder cattle up $0.75, March feeder cattle down $1.80; December lean hogs down $0.95, February lean hogs down $0.47.
LIVE CATTLE:
Friday's trade wasn't overly eventful for the live cattle complex as the week's cash cattle trade was already done with. While the market was thankful for the slightly higher close throughout the futures complex, the day's trade was slow. December live cattle closed $0.12 higher at $136.85, February live cattle closed $0.27 higher at $138.07 and April live cattle closed $0.65 higher at $141.87. Throughout the week, Southern live cattle traded for $138 to $140, mostly at $140 which is $2.00 softer than last week. Northern dressed cattle sold for $217 to $220, mostly at $220 and while that's steady with last week's business, the problem is that the majority of the cattle sold dressed sold with time.
Friday's slaughter is estimated at 121,000 head, 2,000 head more than a week and year ago. Saturday's kill is projected around 58,000, 11,000 head less than a week ago and 12,000 head less than a year ago. It's estimated that this week's slaughter is going to total 668,000 head, which is 8,000 head less than a week ago and 4,000 head more than a year ago.
Boxed beef prices closed mixed: choice down $0.01 ($264.54) and select up $0.56 ($252.24) with a movement of 75 loads (35.27 loads of choice, 10.81 loads of select, 15.87 loads of trim and 13.14 loads of ground beef). Throughout the week choice cuts averaged $266.75 (down $6.42 from last week) and select cuts averaged $254.11 (down $5.33 from last week) with a total movement of cuts, grinds and trim totaling 715 loads.
MONDAY'S CASH CATTLE CALL: Steady to $1.00 lower. Next week's market is going to see some push back from packers as they were able to push the market lower this week. While it's true that Northern dressed prices traded steady, you have to take into account that the vast majority of those cattle sold with time (delivery for the week of Dec. 20) so it's hard to consider their "steady trade" as steady when their later delivery will negatively affect the cash market in the weeks to come.
FEEDER CATTLE:
As the corn market traded lower and the live cattle complex lent some support, the feeder cattle contracts were about to round out the week fully higher before closing Friday afternoon. January feeders closed $0.80 higher at $164.87, March feeders closed $0.22 higher at $165.30 and April feeders closed $0.35 higher at $168.20. While the market did face a slightly tougher complex this past week, given that the live cattle market struggled and fat cattle traded lower, the demand for calves throughout sale barns was still solid. Buyers know that next week is their last real chance to get calves bought before the first of the year as most sale barns take a two-week break between Christmas and the new year. At Billings Livestock Commission in Billings, Montana, compared to last week, demand for yearlings remains continue to beckon for strong prices. Feeder steers less than 500 pounds sold generally steady and steer calves over 500 pounds sold mostly $5.00 higher. Heifer calves under 450 pounds sold steady while those weighing over 450 pounds sold $3.00 to $6.00 higher. The CME Feeder Cattle Index for Dec. 9: down $0.12, $161.51.
LEAN HOGS:
The lean hog market had a choppy week as both the cash market and pork cutout values either saw tremendous support or hardly any at all. Both sectors of the market can thank the unpredictable nature of the holidays. The one good thing about Christmas quickly sneaking up on us all (this is your kind reminder that you better get serious about your holiday shopping before it's too late) is that, as the new year approaches, some of this volatility should pass. But until the calendar flips to 2022, buckle up! The positivity that pushed the cattle complex higher also made its way into the lean hog sector and helped drive hog prices higher amid a weaker cash and cutout value. Wednesday's substantially weaker close is posting as a support plane for the market and allowing traders to feel comfortable in trading mildly higher. December lean hogs closed $0.62 higher at $73.05, February lean hogs closed $3.20 higher at $81.02 and April lean hogs closed $2.92 higher at $85.97. Pork cutouts total 297.74 loads with 250.97 loads of pork cuts and 46.78 loads of trim. Pork cutout values: down $0.77, $86.19. Friday's slaughter is estimated at 476,000 head, 2,000 head more than a week ago and 14,000 head less than a week ago. Saturday's kill is projected at 256,000 head, 4,000 head less than a week ago and 39,000 head less than a year ago. The CME Lean Hog Index for Dec. 8: up $0.12, $70.95.
MONDAY'S CASH HOG CALL: Steady to somewhat lower. With Christmas nearing, packers are likely to support the market a day or two throughout the week but with how aggressive they've been in the past two weeks, their nearby needs should largely be covered.
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