Tuesday Closing Livestock Market Update - Higher Grain Prices Keep the Cattle Contracts on Their Heels

GENERAL COMMENTS

It was a mostly uneventful day for the livestock complex, except for the news that developed Tuesday afternoon regarding Russia and its missile that hit Poland, which consequently sent grain prices higher. Wednesday could see more trade develop as the cash cattle market could see bids start to pop up. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.46 with a weighted average of $85.54 on 11,504 head. December corn is up 9 1/2 cents per bushel and December soybean meal is up $3.90. The Dow Jones Industrial Average is up 56.22 points.

LIVE CATTLE:

The live cattle complex closed mostly lower, but the early contracts of 2023 (February and April) were able to close higher despite the added pressure from the grain sector. The cash cattle market is going to have a tough time trading cattle higher this week as packers bought over 102,000 head in last week's market and have a sizeable volume of cattle already committed to their deferred delivery. An early bid of $238 was offered Tuesday afternoon in Nebraska, but no one opted to jump at its arrival. Early asking prices are noted at $151 to $152 in the South, but are still not established in the North. Trade will likely wait to develop until Wednesday afternoon or sometime Thursday. December live cattle closed $0.30 lower at $151.27, February live cattle closed $0.50 higher at $153.05 and April live cattle closed $0.30 higher at $156.72. 

Tuesday's slaughter is estimated at 129,000 head, steady with a week ago and 6,000 head more than a year ago.

Boxed beef prices closed mixed: choice up $0.38 ($258.36) and select down $1.45 ($231.76) with a movement of 157 loads (86.29 loads of choice, 27.65 loads of select, 14.47 loads of trim and 28.66 loads of ground beef). The choice/select spread sits at $26.60.

WEDNESDAY'S CATTLE CALL: Steady. With packers already having cattle committed for the upcoming weeks, this week's cash cattle market will likely trade steady.

FEEDER CATTLE:

The day's volatile corn market hindered the feeder cattle market's ability to trade higher and ultimately led to the market's lower close. The corn complex was trading mostly steady but when news broke that Russia had fired a missile at Ukraine that ended up landing in Poland -- corn prices jumped higher and ended up closing $0.09 to $0.10 higher. January feeders closed $2.42 lower at $177.02, March feeders closed $1.97 lower at $179.80 and April feeders closed $1.80 lower at $183.02. At Winter Livestock Auction in La Junta, Colorado, compared to last week, steer calves traded steady to $2.00 lower, except those weighing 600 to 700 pounds as they traded steady to $2.00 higher. Heifer calves under 500 pounds sold $3.00 to $5.00 lower, heifers weighing 500 to 600 pounds sold mostly steady and heifers over 600 pounds sold steady to $3.00 lower. Feeder cattle supply over 600 pounds was 38%. The CME Feeder Cattle Index for Nov. 14: down $0.05, $175.18.

LEAN HOGS:

The lean hog complex pushed aggressively throughout Tuesday's trade and was able to keep its contracts elevated through closing. December lean hogs closed $0.45 higher at $85.32, February lean hogs closed $1.10 higher at $90.07 and April lean hogs closed $1.12 higher at $95.50. The market didn't see pork cutout values close higher, and Monday's slaughter was revised lower, which come as slightly disappointing news to traders who need to see strong fundamental support in the market. With the market far from immediate resistance pressure, Wednesday's complex can still trade higher without technical pressures limiting the contracts. Pork cutouts totaled 353.64 loads with 313.18 loads of pork cuts and 40.46 loads of trim. Pork cutout values: down $0.86, $95.70. Tuesday's slaughter is estimated at 490,000 head, 1,000 head less than a week ago and 7,000 head more than a year ago. Monday's slaughter was revised to 485,000 head. The CME Lean Hog Index for Nov. 11: up $0.02, $88.65.

WEDNESDAY'S HOG CALL: Higher. Traders did push Tuesday's cash hog market higher, but they'll still likely need to buy more hogs ahead of the week's end, which will most likely happen Wednesday, and then packer interest will tapper off later in the week.