Tuesday Closing Livestock Market Update - December Live Cattle Close Steady and Above Resistance

GENERAL COMMENTS

It was a mixed day for the livestock complex as, by Tuesday's end, the markets had closed mostly lower, but some key wins were made along the way. Wednesday's WASDE report will likely help the contracts trade higher if strong demand is expected in late 2022. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $2.45 with a weighted average of $87.22 on 11,417 head. December corn is down 8 1/4 cents per bushel and December soybean meal is up $0.30. The Dow Jones Industrial Average is up 333.83 points.

LIVE CATTLE:

The live cattle complex may have closed mostly lower throughout the futures complex, but the steady close in the spot December contract signals that traders are acknowledging that the market could scale higher. Monday's ability to close higher, above the market's resistance at $152.77, was impressive, but Tuesday's follow-through support in keeping the contract above that price point is equally as powerful. Now the question becomes: Will the market continue to trade above that threshold later this week? December live cattle closed steady at $153.05, February live cattle closed $0.25 lower at $154.77 and April live cattle closed $0.30 lower at $158.25. The cash cattle market still hasn't seen any sizeable trade develop and this week's business most likely won't break out until Thursday or later. Early asking prices in the South are noted at $152, but are still unestablished in the North. However, higher prices are fully anticipated. 

Tuesday's slaughter is estimated at 129,000 head, 1,000 head more than a week ago and 5,000 head more than a year ago.

Boxed beef prices closed higher: choice up $0.39 ($264.94) and select up $0.13 ($236.05) with a movement of 151 loads (85.82 loads of choice, 31.74 loads of select, 20.79 loads of trim and 12.75 loads of ground beef). The choice/select spread sits at $28.89.

WEDNESDAY'S CATTLE CALL: Higher. There could be a thin volume of cattle traded in Wednesday's market, but as feedlots yearn for higher prices, they'll likely wait until Thursday to market the majority of their showlists.

FEEDER CATTLE:

The feeder cattle complex closed mixed as the corn market broke lower, rounding out the day $0.07 to $0.08 lower in its nearby contracts, and consequently closing at the lowest price point it's been at over the last month. Feeders weren't able to close fully higher as the market still needs to see breakeven points improve, and the market didn't want to get too aggressive while its counterpart, the live cattle sector, closed lower. January feeders closed $0.02 lower at $179.90, March feeders closed $0.10 lower at $182.15 and April feeders closed $0.05 higher at $185.27.

At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, on a run of 10,816 head, feeder steers and steer calves traded unevenly steady. Feeder heifers traded steady to $3.00 higher and heifer calves over 500 pounds traded steady, but heifers under 500 pounds traded steady to $5.00 higher. Feeder cattle supply over 600 pounds was 43%. The CME Feeder Cattle Index for Nov. 7: down $0.32, $176.59.

LEAN HOGS:

The lean hog complex closed mixed, with its nearby contracts stumbling ahead of closing, while the market's deferred months maintained a mild rally through closing. December lean hogs closed $1.47 lower at $85.57, February lean hogs closed $0.55 lower at $88.50 and April lean hogs closed $0.15 lower at $94.20. It was relieving to see the cash hog market finally sell over 10,000 hogs on one given day, as over the last week the cash market has struggled. Along with the disappointing news of the contracts closing lower, pork cutout values also came in shy of steady as the market saw a steady decrease throughout most of the cuts, but the belly, lion and butt saw the biggest day-over-day negative changes. Pork cutouts totaled 343.67 loads with 305.91 loads of pork cuts and 37.76 loads of trim. Pork cutout values: down $1.92, $95.03. Tuesday's slaughter is estimated at 491,000 head, 9,000 head more than a week ago and 14,000 head more than a year ago. The CME Lean Hog Index for Nov. 4: down $0.57, $90.88.

WEDNESDAY'S HOG CALL: Higher. Yes, Tuesday's cash market closed higher and a sizeable volume traded, but with how few of hogs packers bought last week, it's likely that they'll need to be aggressive at least one more day this week, if not two.