GENERAL COMMENTS:
The cattle complex saw decent technical support in Monday's market, while the lean hog market wasn't that fortunate. The tough part about the rest of the year is going to be keeping cash cattle prices from falling lower as packers have cattle committed to the deferred delivery, which means they won't have to support the cash market much in the weeks to come. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.86 with a weighted average of $58.55 on 5,539 head and a five-day rolling average of $59.90. March corn is down 5 cents per bushel and January soybean meal is down $4.70. The Dow Jones Industrial Average is down 320.04 points and NASDAQ is down 217.32 points.
LIVE CATTLE:
Other than the slightly higher close seen in the future contracts, it was a pretty quiet day for the live cattle market, as no cash cattle trade developed this early in the week. Feedlots know that the remainder of 2021 is going to be a game of defense for them because they know that packers have cattle committed for the weeks ahead and won't have to wildly chase after the cash cattle market. With that being the case, feedlots are hopeful that they'll be able to stay as close to steady as possible and not easily give away the ground that they had just secured. December live cattle closed $0.10 higher at $136.95, February live cattle closed $0.77 higher at $138.85 and April live cattle closed $0.50 higher at $142.37.
Monday's slaughter is estimated at 122,000 head, steady with a week ago and 3,000 head more than a year ago. Showlists are lighter in all regions this week.
Last week's negotiated cash cattle trade totaled 66,624 head. Of that 68% (45,376 head) were committed for the nearby delivery while the remaining 32% (21,248 head) were committed for the deferred delivery.
Boxed beef prices closed mixed: choice down $1.32 ($263.22) and select up $1.40 ($253.64) with a movement of 127 loads (62.90 loads of choice, 26.57 loads of select, 11.73 loads of trim and 25.60 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady to $1.00 lower. It won't likely be until Wednesday or later that fat cattle trade this week, but feedlots are hopeful to hold the market at steady while packers are going to try to drive it lower.
FEEDER CATTLE:
The feeder cattle contracts rallied throughout the day and posted a rather impressive rally in most of their 2022 contracts as a vast majority of them closed over $1.00 stronger. With the lower trending corn market, the complex was able to rally without input prices robbing the day of its momentum. With the live cattle market adding some minor support to the market's momentum, feeders saw Monday's market as a great opportunity to advance their position before the market sees less interest due to the holidays. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, steer and heifer calves traded steady expect those weighing 300 to 400 pounds, which traded $6.00 to $8.00 stronger. In most cases, the heavier weighted calves are out selling their lighter weight counter parts as feed costs as so higher. The CME Feeder Cattle Index for Dec. 10: up $0.65, $162.16.
LEAN HOGS:
The lean hog market saw some pressure technically, but both the cutout and cash markets closed higher. February lean hogs closed $0.27 lower at $80.75, April lean hogs closed $0.12 lower at $85.85 and June lean hogs closed $0.15 lower at $97.02. Steady gains were seen on pretty much all the hog cuts other than in the ham (down $4.54, $66.05), which jumped substantially higher last week. Monitoring processing speeds will be crucial throughout the end of the year as hog supplies could grow unfavorable to producers if packers see much a decrease in chain speed. Demand is expected to be more plentiful in 2022, but in order for those dividends to work their way down into the hands of producers, hog growers have to have supplies favor their position. Pork cutouts total 344.65 loads with 301.99 loads of pork cuts and 42.65 loads of trim. Pork cutout values: up $0.84, $87.03. Monday's slaughter is estimated at 476,000 head, 22,000 head more than a week ago and 15,000 head less than a year ago. Friday's hog slaughter was revised to 466,000 head, and Saturday's slaughter was revised to 235,000 head. The CME Lean Hog Index for Dec. 9: up $0.63, $71.58.
TUESDAY'S CASH HOG CALL: Steady to somewhat lower. Yes, pork cutout values closed slightly higher, but it wasn't a substantial enough of a jump to say that packers are going to be eager to get more hogs committed.
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