GENERAL COMMENTS
The livestock complex closed with mostly higher tones, other than in the nearby lean hog contracts, which continue to long for demand. It was rather impressive that the feeder cattle contracts were able to post any sort of a rally with the corn market closing $0.06 to $0.10 higher in its nearby contracts. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.39 with a weighted average of $81.68 on 4,694 head. March corn is up 10 cents per bushel and January soybean meal is down $21.40. The Dow Jones Industrial Average is up 280.56 points.
LIVE CATTLE:
The live cattle contracts rallied modestly throughout Monday's market, as the complex clung to the technical support found late last week and the recent onset of higher boxed beef prices. If this trend continues into the middle of the week, the cash cattle market could see higher prices. February live cattle closed $0.55 higher at $156.10, April live cattle closed $0.55 higher at $159.90 and June live cattle closed $0.27 higher at $156.20. Feedlots are concerned that, with packers pulling back production speeds, they could face a tough battle in this week's cash cattle market, but if the futures complex and boxed beef prices are in their favor, then seeing steady to slightly higher trade isn't out of the question. Monday's slaughter is estimated at 125,000 head, 2,000 head less than a week ago and 3,000 head more than a year ago. New showlists appear to be higher in Texas and Nebraska/Colorado, but somewhat lower in Kansas.
Last week in Iowa and Nebraska, trade took place on mostly Wednesday and Thursday, with a little bit of clean up trade on Friday. The bulk of Texas deals traded on Thursday and Friday, while Kansas held off trading until Friday. Southern live cattle traded from $153 to $155, but mostly at $154 to $155 in Texas, which is $1.00 lower to steady than the previous week's business. Kansas traded at mostly $155 to $156, which is steady to $1.00 higher than the previous week's weighted average. Northern dressed trade ranged from $243 to $247, but mostly at $247, which is roughly $2.00 lower than the previous week's weighted average. Last week's negotiated cash cattle market sold 59,222 head. Of that 90% (53,024 head) were committed for the nearby delivery, while the remaining 10% (6,198 head) were committed for the deferred delivery.
Boxed beef prices closed higher: choice up $8.09 ($257.02) and select up $4.42 ($225.68) with a movement of 102 loads (41.36 loads of choice, 12.95 loads of select, 27.39 loads of trim and 20.56 loads of ground beef). The choice/select spread sits at $31.34.
TUESDAY'S CATTLE CALL: Steady to $1.00 higher. The cash cattle market won't likely trade until Wednesday or later as feedlots are going to attempt to move the market again, but the longer they wait the week out, the more likely it becomes that they do indeed see higher prices.
FEEDER CATTLE:
The feeder cattle complex closed mostly higher, other than in its spot January contract, which couldn't seem to look past the onset of higher grain prices in Monday's market. Otherwise, the feeder cattle contracts clung to the supportive nature of boxed beef prices and the momentum in the live cattle market. By and large, there are many feedlots that will close out the 2022 calendar year with empty pens as they've struggled to find sound ways to procure feeders and guarantee a profit on the backside. The market expects feeder cattle prices to stay elevated as limited supplies will naturally demand for higher prices, so feeder cattle buyers are closely watching both the cash market and live cattle complex and hope it continues higher. January feeders closed $0.27 lower at $183.65, March feeders closed $0.12 higher at $185.22 and April feeders closed $0.05 higher at $188.65. At Oklahoma National Stockyard in Oklahoma City, Oklahoma, at their midsession point and when compared to last week, feeder steers were trading unevenly steady, and although feeder heifers were only lightly tested, a lower undertone was noted. Steer calves traded mostly steady, but heifer calves were selling $3.00 to $5.00 lower. Feeder cattle supply over 600 pounds was 45%. The CME Feeder Cattle Index for Dec. 9: up $0.72, $179.94.
LEAN HOGS:
The lean hog complex closed mixed with the nearby contracts struggling to find support while the deferred contracts closed mildly higher. December lean hogs closed $0.37 higher at $81.95, February lean hogs closed $0.30 lower at $83.70 and April lean hogs closed $0.35 higher at $90.65. With hog prices falling in China, the nearby contracts' major concern is what demand will amount to both now and in upcoming year. Continuing to monitor export sales through the end of the year and into 2023 will be important. Monday's pork cutout value closed lower, which didn't lend the nearby contracts any support. The carcass value was mostly pulled lower by the $6.26 drop in bellies, the $2.71 drop in the ham and the $2.01 decline in the loin. December lean hogs closed $0.37 higher at $81.95, February lean hogs closed $0.30 lower at $83.70 and April lean hogs closed $0.35 lower at $90.65. Monday's slaughter is estimated at 490,000 head, 7,000 head more than a week ago and 5,000 head more than a year ago. Pork cutouts totaled 334.87 loads with 284.19 loads of pork cuts and 50.68 loads of trim. Pork cutout values: down $1.62, $86.94. Friday's hog slaughter was revised to 475,000 head, and Saturday's hog slaughter was revised to 147,000 head. The CME Lean Hog Index for Dec. 8: down $0.48, $81.99.
TUESDAY'S HOG CALL: Slightly higher. It's likely that Tuesday's cash hog market sees more support as the market only traded 4,694 head throughout Monday's hours.
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