GENERAL COMMENTS:
Traders dove into the livestock complex as the day's hero, as Monday, the livestock complex was hurting to find any substantial support. It was surprising to see Tuesday's cash hog market jump up as aggressively as it did, but that could be problematic for the latter half of the week as packers could let the market trade without needing any more hogs. Hog prices closed higher on the National Direct Afternoon Hog Report, up $2.18 with a weighted average of $60.54 on 8,857 head. March corn is up 7 1/4 cents per bushel and January soybean meal is up $7.80. The Dow Jones Industrial Average is up 560.54 points and NASDAQ is up 360.15 points.
LIVE CATTLE:
With the futures market's higher close, the live cattle market was able to walk out of the day with something positives to cling to. December live cattle closed $1.05 higher at $135.52, February live cattle closed $0.95 higher at $136.92 and April live cattle closed $1.17 higher at $141.35. The technical rally stemmed from trader's willingness to move the market higher as fundamentally speaking, the market is still in a holiday slump as boxed beef prices are veering lower. The week's slaughter is going to come in lighter and cash prices are lower as well. The market some live cash cattle trade developed at $135 in the South and a little bit of trade in the North at $135 as well, which is $1.00 to $3.00 lower than last week's trade.
Tuesday's slaughter is estimated at 120,000 head, 2,000 head less than a week ago and 1,000 head more than a year ago.
Boxed beef prices closed lower: choice down $0.99 ($261.39) and select down $0.75 ($249.92) with a movement of 116 loads (77.16 loads of choice, 20.93 loads of select, 6.05 loads of trim and 11.61 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady with the week's trend. The cash cattle market has seen a little bit of trade in both the North and the South, so it's likely that prices will keep with the week's trend as the market looks to Wednesday.
FEEDER CATTLE:
It was a rallying day for the feeder cattle complex, and even though the corn market closed with $0.07 to $0.08 advancements in its nearby contracts, the feeder cattle market didn't seem to mind. January feeder cattle closed $1.62 higher at $160.85, March feeders closed $1.32 higher at $161.82 and April feeders closed $1.65 higher at $165.40. The feeder cattle complex has no one else to thank for the rally other than traders themselves. Yes, it was helpful that the live cattle market rallied higher throughout the day, but fundamentally speaking, the market wasn't fueled by any positive wins as sale barns are closed this week and cash cattle trade trading weaker. The CME Feeder Cattle Index for Dec. 20: down $0.36, $160.34.
LEAN HOGS:
Traders weren't only kind and generous to the cattle contract, but they were even more generous to the lean hog complex as the nearby contracts closed $2.00 stronger, despite pork cutout values rounding out the day lower. It was also surprising to see the afternoon's cash hog market close higher, as earlier Tuesday morning prices weren't shown due to confidentiality problems. By the day's end, the cash market saw a rather impressive movement, especially considering that it's the week of Christmas, where over 8,000 head sold and prices jumped $2.16 higher. February lean hogs closed $2.95 higher at $82.42, April lean hogs closed $2.07 higher at $85.57 and June lean hogs closed $1.90 higher at $96.70. Pork cutouts totaled 294.83 loads with 265.04 loads of pork cuts and 29.79 loads of trim. Pork cutout values: down $1.58, $84.91. Tuesday's slaughter is estimated at 476,000 head, 9,000 head more than a week ago and 1,000 head more than a year ago. The CME Lean Hog Index for Dec. 17: up $0.60, $72.93.
WEDNESDAY'S CASH HOG CALL: Steady to somewhat lower. The cash hog market could be gearing up for two different outcomes. First, the market could be expecting heightened demand right after the first of the year, and packers are wanting to have plenty of hogs to service those needs. The other option is that packers intend to let the rest of the week's cash hog market drift lower as they have all the hog they need already purchased.
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