GENERAL COMMENTS
Monday provided the cattle contracts the opportunity needed in order to trade higher and the contracts didn't squander that opening in the market. Come Tuesday, it will be interesting to see if traders keep with the upward momentum in the cattle complex, or if they regress and fill in the gap that Monday's contracts made. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.35 with a weighted average of $82.16 on 4,217 head. December corn is down 8 1/4 cents per bushel and December soybean meal is up $1.00. The Dow Jones Industrial Average is down 45.41 points.
LIVE CATTLE:
It was a refreshing day for the live cattle complex as the market finally had the chance to trade after seeing last Friday's bullish Cattle on Feed report. From the day's get-go, the market gapped higher, signaling that traders are fully supportive of the market's desires to trade higher. The combination of last week's strong cash trade that scored a new marketing-year high at $153.04 (which is also the highest the market has traded since 2015) along with the lower number of cattle on feed and the lighter placements gave traders all the support they needed in order to confidently push the market higher. December live cattle closed $0.47 higher at $153.55, February live cattle closed $0.87 higher at $156.72 and April live cattle closed $0.87 higher at $160.12.
Monday's slaughter is estimated at 128,000 head, steady with a week ago but 6,000 head more than a year ago. Showlists this week are lighter in Kansas and Texas, but slightly higher in Nebraska/Colorado.
Last week's negotiated cash cattle trade totaled 90,590 head. Of that, 75,229 head (83%) were committed to the nearby delivery, while the remaining 15,361 head (17%) were committed to the deferred delivery. Most of last week's business took place on Wednesday and Thursday, though there was a little clean-up trade that happened on Friday. In the Southern Plains, cattle traded for $148 to $152 live, but mostly at $150 to $151, which was steady to $1.00 higher than the previous week's weighted average. In the North dressed cattle traded for $236 to $252, but mostly at $242, which was fully steady with the previous week's weighted average.
Boxed beef prices closed higher: choice up $0.51 ($244.38) and select up $0.79 ($233.62) with a movement of 112 loads (69.35 loads of choice, 17.05 loads of select, 11.76 loads of trim and 14.11 loads of ground beef). The choice/select spread sits at $21.76.
TUESDAY'S CATTLE CALL: $1.00 to $2.00 higher. This week's cash cattle market is anticipated to trade higher as packers are in need of cattle and front-end supplies are current.
FEEDER CATTLE:
It was an exhilarating day for the feeder cattle contracts as the market gapped higher at Monday's opening bell and set out to pursue an aggressive day. With the corn complex closing $0.05 to $0.08 lower by Monday's end, the feeder cattle contracts were able to close anywhere from 120 to 197 points higher. It was rather impressive that the market was able to close above its 100-day moving average, signaling that traders are eager to push a technical rally so long as the fundamental support doesn't wane. However, the combination of weaker grain prices and the rather supportive news of last Friday's Cattle on Feed report created a perfect storm for the feeder cattle complex. At Oklahoma's National Stockyards in Oklahoma City, Oklahoma, compared to last week, and at their midsession point, feeder steers were trading steady to $2.00 higher and feeder heifers were trading steady to $2.00 lower. Steer and heifer calves traded mostly $3.00 to $6.00 higher. Demand was good for lightweight grazing cattle. Feeder cattle supply over 600 pounds was 37%. The CME Feeder Cattle Index for Nov. 18: down $0.72, $174.64.
LEAN HOGS:
Hog prices closed mildly higher as the market absorbed some of the energy that brewed in the cattle complex and was thankful to see early support in the cash market. Given that this is a holiday shortened week for Thanksgiving, packers will likely support the cash sector through Wednesday but not be present in Friday's market. Monitoring pork cutout values remains an important task as thanksgiving buying may be done, but retailers will need to stock up for Christmas. The carcass closed $1.45 lower with the biggest losses seen in the ham (down $4.29) and the belly (down $2.51), while the loin posted a modest $1.19 gain. December lean hogs closed $0.42 lower at $83.80, February lean hogs closed $0.60 higher at $90.15 and April lean hogs closed $0.55 higher at $95.47. Pork cutouts totaled 370.33 loads with 327.93 loads of pork cuts and 42.40 loads of trim. Pork cutout values: down $1.45, $91.99. Monday's slaughter is estimated at 488,000 head, 3,000 head more than a week ago and 8,000 head more than a year ago. The CME Lean Hog Index for Nov. 17: down $0.37, $87.77.
TUESDAY'S HOG CALL: Higher. With this being a holiday-shortened week, packers are expected to show the market more interest early on.
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