GENERAL COMMENTS:
With everyone preparing for the holidays, the livestock complex felt left behind and as if it was put on the back burner, as the week traded slow and lethargically. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.68 with a weighted average of $59.41 on 4,850 head. March corn is up 2 cents per bushel and January soybean meal is up $7.20. The Dow Jones Industrial Average is down 532.20 points and NASDAQ is down 10.76 points.
From Friday to Friday, livestock futures scored the following changes: December live cattle down $2.10, February live cattle down $1.65; January feeder cattle down $4.63, March feeder cattle down $3.60; February lean hogs down $0.23, April lean hogs down $1.20.
LIVE CATTLE:
In true Christmas fashion -- after getting used to a warrior-like cash cattle market that rallied for over a month -- it feels as if Ebenezer Scrooge took ahold of the live cattle market, as boxes trended lower throughout the week, the futures complex had close to no luck trading higher and even the cash cattle market lost some positioning as well. While it feels rather depressing to see lower prices plastered through the live cattle sector, it's incredibly important to remember that this is a typical occurrence for the cattle market during the holidays. It's hard for the cattle market to rally when the market is thin due to traders taking time off for the holidays; there isn't a ton of market interest as retailers are simply trying to get through New Year's before they worry about restocking and, even if packers wanted to run fast chain speeds, they'd have a hard time doing so as laborers want time off as well.
December live cattle closed $0.52 lower at $134.75, February live cattle closed $0.62 lower at $136.42 and April live cattle closed $0.35 lower at $140.60. This week Southern live trade had a full range of $133.50 to $138, mostly $136 to $138, generally $2 to $4 lower than the previous week's weighted averages. Northern dressed business has had a full range of $216 to $220, mainly $218 to $220, steady to $2 lower than the prior week's weighted average basis Nebraska.
Friday's slaughter is estimated at 120,000 head, 1,000 head less than a week ago and 4,000 head more than a year ago. Saturday's kill is projected to be around 58,000 head, steady with a week ago and 12,000 head less than a year ago.
Boxed beef prices closed higher: choice up $0.04 ($263.01) and select up $0.14 ($248.28) with a movement of 107 loads (64.11 loads of choice, 19.74 loads of select, 5.62 loads of trim and 17.80 loads of ground beef). Throughout the week choice cuts averaged $262.03 (down $4.72 from last week) and select cuts averaged $249.26 (down $4.85 from last week) with the week's total movement of cuts, grinds and trim totaling 694 loads.
MONDAY'S CASH CATTLE CALL: $2.00 lower. With next week being Christmas, it's very unlikely that the cash cattle market finds much support.
FEEDER CATTLE:
It was a tough week for the feeder cattle contracts as the market was pressured by rallying corn prices and gained no support from the live cattle complex throughout the week, which resulted in a week of sharp losses. Heading into next week's trade, the market will likely be pressured again as the live cattle market isn't expect to do any rallying until demand picks back up after the New Year's, and the market won't be able to reply on fundamental support from active buyers in the sale barns, as they'll all be on break until after New Year's as well. January feeders closed $2.32 lower at $160.25, March feeders closed $2.62 lower at $161.70 and April feeders closed $2.40 lower at $164.87. Montana's Weekly Livestock Auction Summary shared that in the entire state, compared to last week, steer calves under 500 pounds sold steady to $10.00 lower, steers weighing 500 to 599 pounds sold steady. Heifer calves under 450 pounds traded mostly $10.00 lower, heifers weighing 450 to 499 pounds sold steady, and those weighing over 500 pounds sold $3.00 to $6.00 higher. Buyers were willing to buy heavier weight calves for yearling programs this week, which helped increase the price of 500-599-pound offerings. Transportation became an issue later in the week as many trucks were stuck on the highway due to high winds. The CME Feeder Cattle Index for Dec. 16: down $0.04, $161.08.
LEAN HOGS:
The lean hog complex is caught in between the hopefulness of what may become true in 2022 and the cautious hesitancy of here and now. The lean hog contracts -- much like the cattle contracts -- struggled to trade higher throughout the week until the market stumbled upon a strong export report on Thursday. Since then, the market has been able to rally and rounded out Friday's afternoon mostly higher. Hog producers know that navigating through Prop 12 is going to take some work, and the hardships aren't all visible just yet, but they're optimistic that demand will be ample in 2022 and, with having a herd size that favors their selling position, higher prices may even be in their future. Until after the holidays pass, the market is expected to see some resistance as traders are checked out to spend time with their families and processing speeds wane. February lean hogs closed $0.45 higher at $80.80, April lean hogs closed $0.10 lower at $84.77 and June lean hogs closed $0.07 lower at $96.02. Pork cutouts total 288.06 loads with 244.06 loads of pork cuts and 43.99 loads of trim. Pork cutout values: down $5.67, $85.82. Friday's slaughter is estimated at 475,000 head, 9,000 head more than a week ago and 4,000 head less than a year ago. Saturday's kill is projected to be around 332,000 head, 97,000 head more than a week ago and 50,000 head less than year ago. Thursday's slaughter was revised to 458,000 head, 5,000 head less than what was originally stated. The CME Lean Hog Index for Dec. 15: up $0.11, $72.41.
MONDAY'S CASH HOG CALL: Lower. With processing speeds trending lower through the Christmas and New Year's weeks, it's unlikely that packers are very active in the cash market for the time being.
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