GENERAL COMMENTS
It was a doggish Monday for the livestock complex as the contracts closed lower and traders paid the market little to not attention. The big question on everyone's mind this week is: Will the live cattle contracts jump on board and trade alongside the rallying cash cattle market? Time will only tell. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.27 at $83.22 on 8,409 head. December corn is up 3/4 cent per bushel and January soybean meal is up $5.40. The Dow Jones Industrial Average is down 497.57 points.
LIVE CATTLE:
The live cattle market closed with the same doggish attitude that consumed the rest of the livestock markets. Traders have kept a cautious approach despite the cash cattle market championing new cash highs nearly each and every week. With packers having produced 85% of last week's purchase to the nearby delivery, it's evident that they're short bought and in need of cattle. Cash cattle prices will likely be steady if not higher again this week. The bigger question that remains yet to be answered is: Will the futures market jump on board and trade higher along side the cash cattle market? December live cattle closed $0.50 lower at $152.57, February live cattle closed $0.45 lower at $154.67 and April live cattle closed $0.52 lower at $158.45.
Monday's slaughter is estimated at 128,000 head - steady with a week ago and 7,000 head more than a year ago.
Last week's negotiated cash cattle trade took place mostly on Wednesday. Southern cattle traded for $152 to $155.50, but mostly at $154 to $155 which is $3.50 to $4.50 higher than the previous week's weighted average. Northern dressed cattle sold for $243 to $247.50, which was $3.00 higher than the week before. Last week's negotiated cash cattle trade sold 94,864 head. Of that, 85% (80,957 head) were committed to the nearby delivery, while the remaining 15% (13,907 head) were committed for the deferred delivery.
Boxed beef prices closed mixed: choice up $2.70 ($254.53) and select down $5.84 ($228.53) with a movement of 85 loads (55.22 loads of choice, 13.87 loads of select, 9.94 loads of trim and 6.28 loads of ground beef). The choice/select spread sits at $26.00.
TUESDAY'S CATTLE CALL: $1.00 to $2.00 higher. It's unlikely that the market sees any trade develop ahead of Wednesday, and prices will likely be higher again as feedlots still possess the lion's share of the market's leverage.
FEEDER CATTLE:
The feeder cattle market didn't stand much of a chance at trading higher throughout Monday's market as traders kept an arm's distance from the cattle contracts, as corn traded mixed and the live cattle contracts lent no support. If the cash cattle market's momentum can entice the live cattle complex to trade higher, then some spillover support may allow for feeders to trade higher too. But more than anything the feeder cattle market will be eyeing corn prices and trading oppositely. January feeders closed $1.42 lower at $176.87, March feeders closed $0.95 lower at $180.60 and April feeders closed $0.72 lower at $184.40. At Joplin Regional Stockyards in Carthage, Missouri, compared to last week, feeder steers were trading steady at their midsession point, and feeder heifers under 550 pounds were trading steady to $3.00 higher. Feeder cattle supply over 600 pounds was 48%. The CME Feeder Cattle Index for Nov. 25: up $3.56, $177.19.
LEAN HOGS:
The lean hog complex had a tough start to the week as the contracts fell drastically lower throughout Monday's afternoon. December lean hogs closed $3.17 lower at $80.60, February lean hogs closed $3.75 lower at $84.75 and April lean hogs closed $3.52 lower at $90.50. It was surprising to see pork cutout values closed higher, but the day's higher close stems from a jump in belly prices which will likely be the reason for the cutout's lower close tomorrow as the volatility in belly prices is extreme. Pork cutouts total 290.42 loads with 255.98 loads of pork cuts and 34.44 loads of trim. Pork cutout values: up $1.89, $89.52. Monday's slaughter is estimated at 493,000 head, 5,000 head more than a week ago and 10,000 head more than a year ago. The CME Lean Hog Index for Nov. 23: down $0.61, $85.56.
TUEDSAY'S HOG CALL: Slightly higher. With the current downtrend in the marekt, it's likely that packers are cautious about their cash expenses in this week, but they'll still need to procure hogs for the upcoming weeks.
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