GENERAL COMMENTS
It was another phenomenal day for the livestock complex as traders supported the market. With both the Cattle on Feed and Quarterly Hogs and Pigs reports expected to be bullish for the markets, traders and livestock producers alike are eagerly waiting Friday's findings. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.44 with a weighted average of $79.08. The Dow Jones Industrial Average is down 348.99 points.
Thursday's cold storage report shared that total red meat supplies in freezers was down 4% compared to the previous month, but up 10% from last year. Total pounds of beef in freezers were up 2% from the previous month, and up 6% from last year. Frozen pork supplies were down 11% from the previous month, but up 13% from last year. Stocks of pork bellies were up 35% from last month, and up 116% from last year. The Dow Jones Industrial Average is down 380.88 points.
LIVE CATTLE:
It was another tremendous day for the live cattle complex as the market closed mostly higher, only seeing its soon to expire December contract and February contract close lower. With the February contract still able to maintain a price point above the market's resistance threshold of $157, and April live cattle able to close above $161.00, were major accomplishments for the market. After making a bold move like the market did on Wednesday, it was Thursday's job to either solidify and support the move or send tumbling. With the expectation that Friday's Cattle on Feed report will be bullish, with fewer on feed numbers, lighter placements and at least steady, if not more aggressive marketings than compared to a year ago, combined with feedlots' unwillingness to trade cattle for cheaper money and the market's stronger boxed beef prices, traders put the pedal to the metal and let the market trade the strong fundamentals it holds. February live cattle closed $0.40 lower at $157.30, April live cattle closed $0.15 higher at $161.32 and June live cattle closed $0.30 higher at $157.27. There was a small handful of cattle traded in Nebraska for $249, which is $1.00 higher than last week's weighted average, and some Southern live cattle traded at $155 which is fully steady with last week's business. More trade is expected to develop on Friday. Asking prices in the South remain firm at $156 to $157, and in the North at $249 plus.
Thursday's slaughter is estimated at 113,000 head, 9,000 head less than a week ago and 2,000 head less than a year ago.
Thursday's actual slaughter data for the week ending Dec. 10 shared that steers averaged 928 pounds, which is 3 pounds heavier than the previous week but 1pound less than a year ago. For the same week, heifers averaged 851 pounds, 1 pound heavier than a week ago but still steady with year ago weights.
Beef net sales of 4,500 mt for 2022 were primarily for Japan (3,500 mt), South Korea (600 mt) and Mexico (500 mt).
Boxed beef prices closed higher: choice up $0.35 ($265.21) and select up $5.52 ($241.81) with a movement of 91 loads (64.66 loads of choice, 15.24 loads of select, 3.65 loads of trim and 7.09 loads of ground beef). The choice/select spread sits at $23.40.
FRIDAY'S CATTLE CALL: Higher. Prices could run higher in the South as very few cattle have traded in that region, but they'll likely remain steady in the North at this point with the week's trend.
FEEDER CATTLE:
With the live cattle market gaining more momentum, the feeder cattle complex continued to trade higher throughout Thursday's market despite the fact that corn tried to post a modest rally but failed by the day's end. January feeders closed $0.15 higher at $183.97, March feeders closed $0.72 higher at $186.45 and April feeders closed $0.55 higher at $189.90. With placements estimated to range anywhere between 91.8% and 98.0% of a year ago, the feeder cattle market is elated for Friday's market to be nearing so that the Cattle on Feed report can most likely propel its market even higher. The CME Feeder Cattle Index for Dec. 21: down $0.31, $177.83.
LEAN HOGS:
The lean hog complex continued to rally throughout Thursday's market as it not only expects a supportive Hogs and Pigs report Friday, but it also was saw a supportive export report Thursday morning. The anticipation that Friday's report will show fewer breeding sows mixed with the strong exports report helped traders continue to advance the market despite processing speeds being cut drastically. February lean hogs closed $0.65 higher at $89.05, April lean hogs closed $0.75 higher at $96.02 and June lean hogs closed $0.52 higher at $108.95. Pork cutout values did see a tremendous gain Thursday, but that doesn't offset the volatility that remains in the pork cutout sector. Pork cutouts totaled 308.86 loads with 288.99 loads of pork cuts and 19.87 loads of trim. Pork cutout values: up $6.31, $88.76. Thursday's slaughter is estimated at 259,000 head, 216,000 head less than a week ago, and 195,000 head less than a year ago. Wednesday's hog slaughter was revised to 450,000 head. The CME Lean Hog Index for Dec. 20: down $0.29, $80.57.
Pork net sales of 58,700 mt for 2022 were primarily for Mexico (33,400 mt), Japan (9,900 mt) and Canada (4,600 mt).
FRIDAY'S HOG CALL: Lower. With processing speeds cut drastically, it's unlikely that packers will be aggressive in Friday's market.
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