GENERAL COMMENTS:
It was a lower-trading day for all the livestock contracts, as the marketplace didn't see much interest from traders and the cash markets were unsupported. Even though it's a holiday-shortened week, there will be a USDA Cattle on Feed and Quarterly Hogs and Pigs report released on Thursday. Hog prices closed $1.05 lower on the National Direct Afternoon Hog Report, which moved the weighted average to $58.36 on 4,111 head. March corn is down 2 1/4 cents per bushel, and January soybean meal is up $6.70. The Dow Jones Industrial Average is down 433.28 points, and the NASDAQ is down 188.74 points.
LIVE CATTLE:
The live cattle contracts scaled lower throughout the day as the market couldn't summon any trader interest. December live cattle closed $0.27 lower at $134.47, February live cattle closed $0.45 lower at $135.97 and April live cattle closed $0.42 lower at $140.17. The theme this week is going to be lower as packers work to push cash prices lower, boxed beef prices will likely see some pushback, and with it being a shortened holiday week, kill schedules will be lighter this week too. There wasn't any noteworthy cash cattle trade to speak of, but trade could develop as early as Tuesday as it's a short week. Showlists appear to be larger in Texas and Kansas but lighter in Nebraska/Colorado. Monday's slaughter is estimated at 120,000 head -- 2,000 head less than a week ago and 3,000 head more than a year ago.
Last week's negotiated cash cattle trade totaled 48,733 head. Of that, 62% (30,111 head) were committed for the nearby delivery, while the remaining 38% (18,622 head) were committed for the deferred delivery.
Boxed beef prices closed mixed: choice down $0.63 ($262.38) and select up $2.39 ($250.67) with a movement of 94 loads (57.80 loads of choice, 21.16 loads of select, 7.72 loads of select, and 7.56 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: $1 to $2 lower. With it being a short holiday week and packers having cattle committed, the cash cattle market isn't likely to see a whole lot of interest.
FEEDER CATTLE:
I know that it's tempting to look at the corn market's slightly lower close and to grow frustrated with the fact that feeders didn't capitalize on the opportunity to potentially rally -- but when the market is thinly traded because it's a holiday week and the live cattle complex lends no support, feeders weren't equipped to make a higher move. January feeders closed $1.02 lower at $159.22, March feeders closed $1.20 lower at $160.50 and April feeders closed $1.12 lower at $163.75. It's unlikely that the market finds much support this week (or next) as sales barns are closed for the holidays and the futures complex isn't being as aggressively traded. The CME feeder cattle index 12/17/2021: down $0.34, $160.70.
LEAN HOGS:
A downward-pressured sideways chop is likely to be the theme of the lean hog complex through the remainder of the year. Hog producers are hopeful that demand will increase in 2022 and that they will be able to see higher prices as they have less supply pressure on the market from total herd numbers. But we must remember that there will be some supply pressure for the first part of 2022 as packers try to figure out where they are going to send the product that used to go to California as Prop 12 goes into effect on Jan. 1. With that being on the forefront of the market's mind, we may see some volatility in pork prices during that time as well. February lean hogs closed $1.32 lower at $79.47, April lean hogs closed $1.27 lower at $83.50 and June lean hogs closed $1.22 lower at $94.80. Pork cutouts totaled 365.77 loads with 327.58 loads of pork cuts and 38.19 loads of trim. Pork cutout values: up $0.67, $86.49. Monday's slaughter is estimated at 480,000 head -- 4,000 head more than a week ago and 7,000 head less than a year ago. The CME lean hog index 12/16/2021: down $0.08, $72.33.
TUESDAY'S CASH HOG CALL: Steady to somewhat lower. Given that it's going to be shortened holiday week, packers will likely not pay much interest to the cash market.
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