Thursday Closing Livestock Market Update - Feedlots Champion Another Week of Higher Trade

GENERAL COMMENTS:

It was a great day for the livestock contracts as the markets were supported both technically and fundamentally. The lean hog market was especially happy to see a strong export report, and feedlots were ecstatic to move the cash cattle market higher again this week. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.08 with a weighted average of $57.87 on 4,420 head. March corn is up 5 1/4 cents per bushel and January soybean meal is down $0.30. The Dow Jones Industrial Average is up 617.75 points and NASDAQ is up 127.27 points.

LIVE CATTLE:

There's wasn't much in Thursday's equation that didn't beckon on behalf of a stronger, rallying live cattle market. December live cattle closed $1.65 higher at $137.65, February live cattle closed $0.97 higher at $139.57 and April live cattle closed $0.82 higher at $142.60. Cash cattle trade started to heat up around the noon hour, and with the recent leverage that feedlots have gained, they were able to throw their weight around in the market and demand higher prices. Northern dressed cattle traded for mostly $220, $3.00 higher than last week and Southern live cattle traded for mostly $142, $3.00 higher than last week as well. More than anything, feedlots are thankful that processing speeds are continuing to be pushed. It's hard to move the market higher when front-end supplies aren't current, which thankfully wasn't the case Thursday. Thursday's slaughter is estimated at 123,000 head, incomparable to last week due to the holiday, but 3,000 head more than a year ago.

Thursday's actual slaughter data shared that for the week ending Nov. 20, steer carcass weights regressed while heifers gained. Compared to the previous week, steers averaged 922 pounds (down 2 pounds) and heifers average 849 pounds (down 5 pounds).

Beef net sales of 21,600 mt for 2021 were up 12% from the previous week and 5% from the prior four-week average. The three largest buyers were South Korea, China, and Japan.

Boxed beef prices closed higher: choice up $1.80 ($272.02) and select up $0.28 ($258.25) with a movement of 174 loads (125.91 loads of choice, 26.91 loads of select, 3.78 loads of trim and 17.62 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady. Seeing that cattle have traded in both the Northern and Southern Plains, it's likely that the week's prices are set and any cattle that do trade will trade steady with the week.

FEEDER CATTLE:

Despite the corn market closing modestly higher, the feeder cattle contracts found a gust of support that trickled over from the live cattle market as cash cattle traded higher again this week. Earlier in the day, the feeder cattle contracts were worried about the higher grain prices, but by the day's end the grain market's momentum (though something always worthy of watching) wasn't as pressuring and allowed for the feeder complex to rally in leu of the live cattle market's success. January feeders closed $0.05 lower at $165.77, March feeders closed $0.42 higher at $168.32 and April feeders closed $0.45 higher at $170.90. At Huss Livestock Auction in Kearney, Nebraska compared to two weeks ago steers under 650 pounds sold $5.00 to $7.00 higher and steers over 650 pounds which simply sold steady. Heifers sold $6.00 to $10.00 higher expect though weighing 650 pounds as they sold roughly $1.00 lower. Demand was excellent from start to finish, and a lot of loads were going out of state to be fed or to be grazed on winter wheat pasture. The CME Feeder Cattle Index for Dec. 1: down $0.26, $161.34.

LEAN HOGS:

Thanks to the ginormous leap that the ham and belly cuts made Thursday afternoon, ham up $17.27 and bellies up $11.04, the lean hog complex closed higher as the market found support from nearly all sectors. Upon seeing the day's supportive export report (plenty of product moved and China listed as one of the three top buyers), the lean hog contracts rallied and didn't fear much of anything. December lean hogs closed $0.77 higher at $74.40, February lean hogs closed $1.87 higher at $82.00 and April lean hogs closed $1.25 higher at $86.32. The cash hog market didn't see as much support in Thursday's market, but given hog aggressive packers were earlier in the week that doesn't come as a surprise. Pork cutouts total 380.47 loads with 337.61 loads of pork cuts and 42.85 loads of trim. Pork cutout values: up $5.72, $88.09. Thursday's slaughter is estimated at 480,000 head, incomparable to last week due to the holiday, but 11,000 head less than a week ago. The CME Lean Hog Index for Nov. 30: up $0.23, $70.27.

Thursday's slaughter data shared that for the week ending Nov. 20, hog carcass weights remained steady as live weights averaged 291 pounds and dressed weights averaged 217 pounds.

Pork net sales of 41,400 mt for 2021 were up noticeably from the previous week and up 48% from the prior four-week average. The three largest buyers were Mexico, China, and Japan.

­­­­­FRIDAY'S CASH HOG CALL: Steady. With packers having bought aggressively in the cash hog market earlier in the week, it's not likely that they will chase the market aggressively come Friday.