GENERAL COMMENTS:
Cattle futures are rallying Monday, though the market is fully aware that later this week and throughout the remainder of 2021 the fundamental side of the market is going to get tough. With retailers having bought all their holiday cuts and processing plants running cut shifts because of the holiday, demand won't be as pressuring and consequently cash prices are likely to see some setback. March corn is down 5 1/4 cents per bushel and January soybean meal is down 4.20. The Dow Jones Industrial Average is down 318.05 points and NASDAQ is down 162.11 points.
LIVE CATTLE:
Despite last week's disappointing cash cattle trade and knowing the market's downward move will likely continue throughout the remaining weeks of 2021 -- live cattle futures are moderately higher Monday afternoon. While the news about last week's cash cattle market isn't as fun to banter about as the recent rally was, we soberly knew that this was going to happen before year end. With the cash cattle market having accomplished a sporty rally over the last month, at some point packers were going to pull back and show less interest in the cash market as box prices are waning and slaughter speeds are going to lessen with the holidays approaching. As the market takes a defensive position now, trying to safely protect the price threshold it's recently been able to obtain, feedlots are praying they don't have to give up too much position before 2022 comes. December live cattle are up $0.20 at $137.05, February live cattle are up $0.72 at $138.82 and April live cattle are up $0.32 at $142.20.
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 are higher: choice up $0.01 ($264.55) and select up $1.42 ($253.66) with a movement of 80 loads (37.13 loads of choice, 13.20 loads of select, 9.90 loads of trim and 19.85 loads of ground beef).
FEEDER CATTLE:
With the live cattle futures trending higher, and the corn market tumbling lower into Monday afternoon, the feeder cattle futures have been given the green light to trade higher. January feeders are up $0.60 at $165.52, March feeders are up $0.97 at $166.25 and April feeders are up $0.90 at $169.10. The January contract has been bouncing from $163 to $165.50 and hasn't wanted to break out of that plane, in one direction or another. With feeder cattle demand likely to see less interest after this week, as sale barns take a break for the holidays and don't resume until after the first of the year, the market could see some short-term pressure until sales pick back up.
LEAN HOGS:
As the lean hog contract breaks into the new week, the market can't help but wish away 2021 and star gaze to the 2022 contracts as those contracts hold a lofty premium to spot December. December lean hogs are down $0.70 at $72.35, February lean hogs are down $0.42 at $80.62 and April lean hogs are down $0.32 at $85.65. Last week the market was given a shot in the arm with some last-minute buying from retailers, as the hams shot up in value; but with Christmas being next week, the market won't have that type of support again this week.
The projected CME Lean Hog Index for 12/10/2021 is up $0.60 at $72.18 and the actual index for 12/9/2021 is up $0.63 at $71.58. Hog prices are higher on the National Direct Morning Hog Report, up $0.99 with a weighted average of $58.47, ranging from $57.00 to $66.00 on 5,016 head and a five-day rolling average of $58.11. Pork cutouts total 210.62 loads with 176.60 loads of pork cuts and 34.02 loads of trim. Pork cutout values: up $4.86, $91.82.
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