GENERAL COMMENTS:
It's been a tough go for both the cattle and hog markets Thursday morning in regard to the weekly export report, which wasn't positive for either market. But lean hog futures are rallying upon a strong cash market and upon strong pork cutout values. March corn is up 2 cents per bushel and January soybean meal is up $0.20. The Dow Jones Industrial Average is down 43.03 points and NASDAQ is down 112.28 points.
LIVE CATTLE:
The live cattle complex has had a rough go Thursday -- a lower futures complex, a poor export report and lower cash cattle trade. December live cattle are down $1.02 at $136.52, February live cattle are down $0.92 at $137.75 and April live cattle are down $0.72 at $141.15. The downward pressure from all angles has been absorbed and with RHW Christmas and New Year holidays just weeks away, the pressure could last until the beginning of 2022. There's been a light trade developing in the South at $140 which is roughly $2.00 lower than last week. Northern dressed cattle are trading steady at $220, but most of the sales in Nebraska have been set for delivery the week of 12/20/2021, which doesn't bode well for the market.
Beef net sales of 4,200 metric tons (mt) for 2021 -- a marketing year low -- were down 80% from the previous week and 81% from the prior four-week average. The three largest buyers were Canada, China and Japan.
The Fed Cattle Exchange Auction listed a total of 1,708 head, of which 278 actually sold, and 1,430 head were listed as unsold, as they did not meet the reserve prices, which ranged from $132 to $142. Opening prices ranged from $130 to $139, high bids ranged from $130.25 to $140.25. The state-by-state breakdown looks like this: Texas 1,245 total head, with 278 head sold at $140 to $140.25, and 967 head went unsold; Kansas 392 total head, of which none actually sold; California 71 total head, of which none actually sold.
Boxed beef prices are mixed: choice up $0.16 ($264.27) and select down $1.24 ($251.85) with a movement of 130 loads 74.74 loads of choice, 15.72 loads of select, 4.97 loads of trim and 34.57 loads of ground beef).
FEEDER CATTLE:
With essentially no support from the live cattle market, the feeder cattle futures are left to scale lower. Thankfully, demand throughout the countryside hasn't weakened; but the futures aren't responding to the positive fundamental support which could be because the corn market is mixed. January feeders are up $0.12 at $163.52, March feeders are down $1.07 at $164.80 and April feeders are down $1.00 at$ 167.50. The next 1 1/2 weeks will be busy for sale barns as they push the last of the calves through the market this year before taking their long holiday break before they resume after the New Year.
LEAN HOGS:
Lean hog futures didn't find a supportive export report, but with pork cutout values closing strong Wednesday afternoon and the cash hog market strong Thursday morning, the market is rallying. December lean hogs are up $1.02 at $71.85, February lean hogs are up $0.67 at $76.70 and April lean hogs are up $0.62 at $82.05. If pork cutout values can close higher again Thursday afternoon, the cash market may round out the week higher as packers could get busy rounding up supplies as they hope demand strengthens in 2022.
Hog prices are higher on the National Direct Moring Hog Report, up $4.29 with a weighted average of $59.81, ranging from $56.00 to $67.00 on 5,971 head and a five-day rolling average of $57.91. The projected CME Lean Hog Index for 12/8/2021 is up $0.12 at $70.95, and the actual index for 12/7/2021 is down $0.11 at $70.83. Pork cutouts total 187.90 loads with 159.80 loads of pork cuts and 28.11 loads of trim. Pork cutout values: up $0.27, $90.71.
Pork net sales of 19,800 mt for 2021 were down 52% from the previous week and 26% from the prior four-week average. The three largest buyers were Mexico, Japan and South Korea
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