GENERAL COMMENTS:
Cash cattle deals this week are being marked anywhere from $155 to $157 so far, which is steady to $2 higher than last week's weighted averages. Losses in the feed grain markets Thursday are giving feeder cattle futures contracts an opportunity to explore mixed or higher prices during the middle of the session. Lean hog futures, meanwhile, have suddenly and emphatically decided to erase all of the week's previous panicky losses with gains of more $2 per cwt. December corn is down 8 1/4 cents per bushel and December soybean meal is down $1.60 per ton. The Dow Jones Industrial Average is down 330 points.
LIVE CATTLE:
The live cattle futures market continues to linger within a dollar or two of its recent contract highs, but without the day-to-day volatility of more headline-driven markets. December live cattle are down $0.375 at $152.70, February live cattle are down $0.575 at $155.10 and April live cattle are down $0.325 at $158.95. The April contract, for instance, would only have to stretch about $1.50 higher to exceed the contract high from last week ($160.30), but without some fresh momentum or encouragement from the physical market, may see no reason to do so. The cash cattle trade that's been seen so far on Thursday includes Nebraska steers and heifers at $157, and some northern dressed business at $244 to $245, steady with last week. That builds on trade earlier this week in parts of the South at $155, also steady with last week, but recall that last week's prices were themselves a $3 week-over-week jump -- a performance that may be hard to repeat. Thursday's slaughter is estimated at 128,000 head, which is 4,000 more than a year ago.
Boxed beef prices are higher Thursday morning: choice up $0.23 ($255.11) and select up $1.97 ($226.98) with a movement of 87 loads (67.88 loads of choice, 8.43 loads of select, 4.62 loads of trim and 6.22 loads of ground beef).
FEEDER CATTLE:
Talk of rejiggering some biofuels mandates has sent the soybean market into a tailspin Thursday, with soybean meal and corn following along lower. The feeder cattle market therefore feels a little relief about feed prices and spent some of the morning in higher territory before sagging lower. January feeders are down $0.15 at $180.325, March feeders are up $0.20 at $183.65 and April feeders are up $0.375 at $187.175. Even stable strength is a reminder of the long-term bullish supply-and-demand scenario for calves in this drought-plagued country. Trading volume tends to grow more active during the afternoon, and the focus of the long-term bullishness -- and the best potential for gains at the session's close -- may be centered around the deferred contracts for mid-2023 and beyond.
LEAN HOGS:
The February lean hog contract is moving enthusiastically higher Thursday, at one point trading above $88 per cwt and effectively erasing all of this week's previous bearish angst about Chinese Covid lockdowns. December lean hogs are up $0.025 at $82.925, February lean hogs are up $2.70 at $88.05 and April lean hogs are up $2.575 at $93.225. Gains of $2 or more extend all the way through the August 2023 contract, although in none of these cases do the gains extend past the highs established early last week. The February contract has struggled to maintain buying interest any time it's attempted to move above $90, and with domestic pork prices stalling and the cash prices for lean hogs experiencing pressure from the packers this week, the futures market will likely resist sticking its neck out too far. Thursday's slaughter is seen at 492,000 head, which is 9,000 more than a year ago at this time.
The projected CME Lean Hog Index for Nov. 29 is down $0.32 at $83.89, and the actual index for Nov. 28 was down $0.42 at $84.21. Thursday's Daily Direct Morning Hog Report is delayed by technical difficulties, but for a benchmark, the latest 5-day rolling average was $84.73. Pork cutouts total 145.03 loads with 113.55 loads of pork cuts and 31.48 loads of trim. Pork cutout values: up $0.28, $87.61.
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