GENERAL COMMENTS:
The cattle contracts struggled throughout Monday's trade, but the lean hog contracts leaped with ample support, still steaming from last week's Hogs and Pigs report. If feedlots can push the cash cattle market to trade steady to $1.00 stronger, then both live cattle and feeder cattle contracts stand a chance at trading higher. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.78 with a weighted average of $59.75 on 7,435 head. March corn is up 9 cents per bushel and March soybean meal is up $7.80. The Dow Jones Industrial Average is up 351.82 points and NASDAQ is up 217.89 points.
LIVE CATTLE:
It was a mixed day for the live cattle complex as the futures market saw some support and some resistance, but boxed beef prices closed higher and the cash market is expected to trade steady, if not a little stronger. December live cattle closed $0.25 higher at $137.30, February live cattle closed $0.35 lower at $139.27 and April live cattle closed $0.25 lower at $143.67. The cash cattle market didn't see any interest throughout Monday's trade, and it's not likely that the market sees much strong attention until Wednesday, even though it's a short week. New showlists appear to be mixed, higher in Kansas and Texas, but lower in Nebraska and Colorado.
Last week's negotiated cash cattle trade totaled 36,779 head. Of that, 86% (31,632 head) were committed for the nearby delivery, while the remaining 14% (5,147 head) were committed for the deferred delivery.
Monday's slaughter is estimated at 116,000 head, 4,000 head less than a week ago and 1,000 head less than a year ago. Friday's slaughter is estimated at 10,000 head and Saturday's slaughter was estimated at zero head.
Boxed beef prices closed higher: choice up $1.65 ($264.59) and select up $2.23 ($255.18) with a movement of 116 loads (83.81 loads of choice, 11.22 loads of select, 11.18 loads of trim and 9.65 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady to $1.00 stronger. I don't foresee feedlots letting too many cattle go until they get steady, if not stronger prices than last week.
FEEDER CATTLE:
Without the live cattle complex trading fully higher and there being no interest in the cash cattle market yet, the feeder cattle contracts had little hope of trading higher while the nearby corn contracts rallied $0.09 higher in their nearby contracts. The deferred contracts of the second half of 2022 traded mildly higher, which makes sense as supplies of feeder cattle and calves are going to be significantly lighter than what they were this year. January feeders closed $1.05 lower at $162.40, March feeders closed $0.47 lower at $163.27 and April feeders closed $0.45 lower at $166.92. Until the live cattle market extends some support, the feeder cattle contracts are expected to trade lower as the market doesn't have any fundamental support. The CME Feeder Cattle Index for Dec. 24: down $0.08, $159.14.
LEAN HOGS:
Still rallying from the strong Quarterly Hogs and Pigs report, the lean hog market didn't pay any attention to the cash hog market's lower close or the sharply lower close of pork cutouts. February lean hogs closed $0.42 higher at $83.65, April lean hogs closed $1.07 higher at $87.72 and June lean hogs closed $0.80 higher at $98.10. Heading into Tuesday's trade, the market will likely feel some push back. Though the market's long-term trajectory is friendly, the spot market has some hurdles to face as both cash and pork cutout prices are weaker. Monday's slaughter is estimated at 480,000 head, steady with a week ago and 8,000 head less than a year ago. Friday's slaughter is estimated at 44,000 head and Saturday's slaughter is estimated at zero head. There was a correction to last Thursday's slaughter, as there was only 454,000 head slaughter, which is 10,000 head less than what was originally stated. Pork cutouts total 370.09 loads with 320.56 loads of pork cuts and 49.53 loads of trim. Pork cutout values: down $5.14, $86.33. The CME Lean Hog Index for Dec. 22: down $0.66, $71.67.
TUESDAY'S CASH HOG CALL: Steady. While I understand that pork cutout values crashed lower and that packers have some hogs committed for the nearby term, packers could also want to get as many hogs as they can committed as demand should pick back up after the new year.
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