GENERAL COMMENTS
Feeder cattle futures posted the most impressive gains during Friday's trading session and on a week-over-week basis, but neither this market nor the live cattle nor lean hogs dared to explore any fresh contract highs during a week when global economic uncertainty was emphasized. In the cash cattle market, most of this week's Southern live deals took place at $155, fully steady with last week's weighted averages, but some improvement was noted Friday afternoon with live bids of $158 or $159 in Iowa and Nebraska. Northern dressed deals were marked mostly at $249, $4 higher than last week's weighted averages. The National Direct Afternoon Hog Report showed purchased swine prices down $3.04 to a weighted average of $82.22 on 3,705 head. Prices ranged from $74 to $88, and the five-day rolling average is now $84.95. December corn moved down 15 cents to $6.35 per bushel and January soybean meal closed up $2.50 per ton to $424.10. The Dow Jones Industrial Average was up 34.80 points and the NASDAQ was down 47.64 points.
From Friday to Friday, livestock futures scored the following changes: December live cattle up $0.28, February live cattle up $0.75; January feeder cattle up $4.15, March feeder cattle up $3.72; December lean hogs off $1.35, February lean hogs up $1.93; December corn off $0.33, March corn off $0.25.
LIVE CATTLE:
Live cattle futures gains were mild Friday, but they were nevertheless gains, and they maintained the overall bullish tone of this market. The December contract closed up $0.30 at $153.35; the February contract closed up $0.45 at $155.875, and the April contract closed up $0.325 at $159.575. Values for wholesale beef products, including the all-important ground beef prices, kept dwindling through the month of November, but packers are just having to accept the squeeze on their profit margins, because they're not finding any overeager surplus of market animals to keep the lines running at the bullish pace demanded. It was therefore another week of strong performance in the cash cattle market, with deals marked at mostly $155 live basis (steady with last week) or $249 dressed basis ($4 higher than last week).
Boxed beef prices were lower Friday afternoon: choice down $3.64 ($249.93) and select down $0.44 ($224.56), with a movement of 107 loads (61.58 loads of choice, 8.3 loads of select, 4.84 loads of trim and 32.63 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady to $1.00 higher. If packers are determined to keep the lines moving at their recent aggressive pace, they may have to keep exploring historically high prices.
FEEDER CATTLE:
As traders' confidence grew through the last half of Friday's trading session, the feeder cattle futures market was able to keep churning above last week's highs. At the close, the January contract was up $1.375 at $182.45, the March contract was up $0.975 at $185.275, and the April contract was up $0.825 at $188.625. For cow-calf operators with calves to sell or hedge, therefore, this means in the near term that in some regions and for lighter-weight and higher-quality calves, breaching a price of $200 is certainly still possible at the sale barn. There is little danger of the tight supply conditions changing over the next six months (or the next few years, for that matter), so farmer feeders may feel some confidence retaining ownership. But the really exciting opportunities may be highlighted by the August, September, October, and November 2023 timeframes, where benchmark futures prices are already trading above $200 per cwt without basis considerations and offer attractive hedging and LRP insurance prospects for producers.
LEAN HOGS:
The lean hog market had a close call with international import disaster this week, but prices ultimately ended back within the comfortably neutral range where they've been stuck for the past few weeks. The December contract closed down $0.70 at $82.425; the February contract closed up $1.225 at $90.425; and the April contract closed up $1.575 at $95.825. The most actively-traded February contract, for instance, covered nearly $7 of chart area during this volatile week of whipsawing prices, trading anywhere from $83 during Wednesday's anxiety about China's COVID-19 lockdowns to $90 during Friday's outside market bullishness. A deal to avoid a rail strike disaster and a positive November jobs report on Friday morning reassured the market about consumers' ability to head to the meat counters with money in their pockets. Pork prices found some recovery, too, toward the end of the week, but packers haven't shared this down the supply chain and stayed comfortable bidding less than $85 for hogs whenever they possibly can. The afternoon pork cut-out showed the overall carcass value up $2.42 to $88.94. There were 323.51 total loads (301.10 loads of cuts and 22.42 loads of trim). The CME Lean Hog Index for Nov. 30: down $0.65, $83.24, and the projected Index for Dec. 1: down $0.37, $82.87.
MONDAY'S CASH HOG CALL: Steady to $1 higher. Packers may want to jealously guard the profit margins this week's volatility has provided.
No comments:
Post a Comment