GENERAL COMMENTS:
The week's doggish attitude is continuing well into Thursday's market for feeder cattle futures, while the live cattle and lean hog contracts see a little more support amid a strong export report. That doesn't mean the cash cattle market is seeing any better interest as there's yet to be any more trade seen. March corn is up 4 1/2 cents per bushel and January soybean meal is up $1.10. The Dow Jones Industrial Average is up 129.57 points and NASDAQ is down 255.07 points.
LIVE CATTLE:
Seeing a little bit of green throughout the live cattle contracts is refreshing after a tough week when bearish pressures have been strong. Upon unveiling a supportive export report Thursday morning, the contracts found modest support and have been able to trade somewhat higher. The late spring/early summer months of 2022 aren't joining in on the rally, but the rest of the complex is. December live cattle are up $0.27 at $135.27, February live cattle are up $0.15 at $136.72 and April live cattle are down $0.22 at $140.70. The cash cattle market hasn't seen any renewed interest and it's likely this week's trade could be light as feedlots want more money and packers aren't willing to pay higher prices. Thankfully feedlots sit in a positive position in regards to their showlists and don't need to sell cattle as their inventory is manageable.
Beef net sales of 17,100 metric tons (mt) for 2021 were up noticeably from the previous week but down 3% from the prior four-week average. The three largest buyers were Japan (4,700 mt), South Korea (4,500 mt) and China (3,700 mt).
Boxed beef prices are higher: choice up $3.28 ($263.54) and select up $0.67 ($248.12) with a movement of 76 loads (47.15 loads of choice, 12.94 loads of select, 4.12 loads of trim and 11.91 loads of ground beef).
FEEDER CATTLE:
The feeder cattle contracts aren't able to rally like the live cattle and lean hog contracts as the corn market is keeping feeders on their guard, given corn future's 4- to 5-cent rally. While support technically is near impossible to come by this week for feeders, thankfully that hasn't been the case in the cash trade throughout the countryside. Buyers have been attending sales this past week knowing full well this is really their last opportunity to get calves/feeders bought before the New Year. In viewing some of Wednesday's sales, I found it particularly interesting that heifer calves are starting to demand more and more interest as some producers are buying back and restocking their herds. January feeders are down $1.12 at $162.32, March feeders are down $0.35 at $164.12 and April feeders are down $0.50 at $166.85.
LEAN HOGS:
While Prop12 may be pressuring the market as its Jan. 1 arrival is getting closer and closer, thank God for strong exports and our ability to move product when necessary. Upon seeing the day's strong export report, the futures contracts have been able to rally as opposed to their weaker trend seen in the beginning half of the week. Both the midday pork cutouts and cash market are also seeing a little interest and trading higher, but whether or not that positive nature will carry into the afternoon's reports is unknown. February lean hogs are up $0.60 at $79.92, April lean hogs are up $0.40 at $84.60 and June lean hogs are up $0.45 at $96.07.
Pork net sales of 31,100 mt for 2021 were up 58% from the previous week and 20% from the prior four-week average. The three largest buyers were Mexico (22,700 mt), Canada (2,700 mt) and Japan (2,100 mt).
The projected CME Lean Hog Index for 12/15/2021 is up $0.11 at $72.41, and the actual index for 12/14/2021 is up $0.20 at $72.30. Hog prices are higher on the National Direct Morning Hog Report, up $0.53 with a weighted average of $59.41, ranging from $58.00 to $66.00 on 3,810 head and a five-day rolling average of $58.57. Pork cutouts total 154.62 loads with 134.14 loads of pork cuts and 20.48 loads of trim. Pork cutout values: up $2.88, $90.71.
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