GENERAL COMMENTS
Both the live cattle and lean hog markets kept their ambitious tone through closing, but the feeder cattle market couldn't muster the same support as it closed completely lower. The big question for the cattle complex this week is: Will feedlots keep the cash market steady? Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.79 with a weighted average of $79.88 on 5,791 head. March corn is down 5 3/4 cents per bushel and March soybean meal is down $14.10. The Dow Jones Industrial Average is down 162.92 points.
LIVE CATTLE:
The live cattle complex closed higher with the market still rallying on last week's advancement. This week's cash cattle market will be one worth watching as it's a coin toss on who will champion the direction of price. Feedlots remain in a good position as showlists are extremely current, and last week's carcass data proved the fact that weights are declining. Not to mention, packers are seeing stronger boxed beef prices so that helps strength their margin. However, packers have dialed back production speeds, and will use any opportunity given to regress the cash market or hold it at least steady as 2023's market will be summarized by consistently higher cash prices. December live cattle closed $0.22 higher at $155.27, February live cattle closed $0.27 higher a $156.05 and April live cattle closed $0.22 higher at $159.92. New showlists appear to be mixed, larger in Kansas, but smaller in Texas and Nebraska/Colorado.
Monday's slaughter is estimated at 100,000 head, 25,000 head less than a week ago and 21,000 head less than a year ago. Saturday's cattle slaughter was revised to 20,000 head.
Last week most of the cash cattle market waited to trade until Thursday. Northern dressed cattle traded from $243 to $250, but mostly at $248, which is $1.00 higher than the previous week's weighted average. Southern live cattle traded at mostly $155, which is steady to $0.50 lower than the previous week's weighed average. Last week's negotiated cash cattle market traded 74,567 head. Of that, 72% (53,403 head) were committed for the nearby delivery, while the remaining 28% (21,164 head) were committed for the deferred delivery.
Boxed beef prices closed higher: choice up $1.00 ($263.83) and select up $3.12 ($238.57) with a movement of 74 loads (43.55 loads of choice, 18.77 loads of select, zero loads of trim and 11.49 loads of ground beef). The choice/select spread sits at $25.26.
TUESDAY'S CATTLE CALL: Steady. Packers are going to try to hold the cash cattle market steady as they know their time to do so is now before production speeds increase after the holidays.
FEEDER CATTLE:
Even though the nearby corn contracts closed $0.03 to $0.05 lower by Monday's end and the live cattle market kept with its modest rally, the feeder cattle complex couldn't gain enough traction to trade higher in Monday's market. Unfortunately, the feeder cattle complex won't likely see much interest from traders from now until after the first of the year as most sale barns held their last sale for 2022 last week. It's as if the feeder cattle market goes on pause during this time span even though the feeder cattle contracts are still traded. Nevertheless, this mundane sideways chop will likely be the market's tone until 2023 unless something wild takes place in either the live cattle or corn markets. January feeders closed $1.67 lower at $182.10, March feeders closed $0.90 lower at $183.80 and April feeders closed $0.65 lower at $187.47. The CME Feeder Cattle Index for Dec. 16: down $0.77, $178.74.
LEAN HOGS:
The lean hog complex closed mixed with most of the nearby contracts able to keep their momentum through closing but some of the contracts did see some minor pushback. The market's ability to close higher solely stemmed from traders' willingness to rely on the technical support established late last week as pork cutout values lent no support by the day's end. February lean hogs closed $0.07 lower at $85.70, April lean hogs closed $0.27 higher at $93.00 and June lean hogs closed $0.30 higher at $106.95. Pork cutout values closed $2.51 lower with the biggest reduction seen in the picnic, which fell $12.61, and then the lion dropped $3.65 lower and hams fell $2.40 lower. The big question heading into Tuesday's market will be weather or not traders believe that they possess enough technical support to keep the market trading steady/somewhat higher without much fundamental backing? Time will tell. Pork cutouts totaled 335.72 loads with 302.90 loads of pork cuts and 32.82 loads of trim. Pork cutout values: down $2.51, $84.93. Monday's slaughter is estimated at 486,000 head - 4,000 head less than a week ago and 4,000 head more than a year ago. Friday's hog slaughter was revised to 449,000 head, and Saturday's hog slaughter was revised to 207,000 head. The CME Lean Hog Index for Dec. 15: down $0.33, $81.55.
TUESDAY'S HOG CALL: Higher. It's not likely that the market will se a big jump in prices, but packers will likely need to secure inventory ahead of the Christmas holiday. Whether that will happen to the extent where prices turn higher on Tuesday or Wednesday is the real question.
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