GENERAL COMMENTS:
It's a tough day for the cattle complex as both the live cattle and feeder cattle markets trade substantially lower, and the lean hog market isn't trading any better either. As traders cautiously view the marketplace, the timid nature of the futures market mixed with slightly higher corn prices and a lack of fundamental demand early this week as hurt both cattle and hog futures. March corn is up 1 3/4 cents per bushel and January soybean meal is up $18.00. The Dow Jones Industrial Average is down 316.23 points.
LIVE CATTLE:
It's a gloomy day throughout the live cattle complex as the market stomachs the fact that Monday's choice close was the lowest that the year has seen. Now, to be clear, it's normal to see a downturn in boxed beef prices through December, but the real question for market is: Where's the actual bottom? It's likely that the market will continue to face pus back in boxed beef prices throughout the week, which could wane negatively on the futures complex. Whether or not these weaker boxed beef prices have an affect on this week's cash cattle market remains unknown. To feedlots' advantage, showlists are extremely current, which will likely keep packers engaged in the market to some degree. But with packers expected to scale back production as a way to manage margin and minimize their need to chase after the cash sector, feedlots could be faced with steady prices. Some early asking prices are noted in the South at $157, but the North hasn't disclosed their early asking prices yet. December live cattle are down $1.45 at $151.77, February live cattle are down $1.90 at $153.92 and April live cattle are down $1.72 at $157.85.
Boxed beef prices are lower: choice down $0.96 ($242.35) and select down $0.68 ($220.43) with a movement of 84 loads (48.68 loads of choice, 15.73 loads of select, 4.72 loads of trim and 14.58 loads of ground beef).
FEEDER CATTLE:
The topsy-turvy nature of the relationship between feeder cattle and corn continues as the corn market is posing a minor $0.02 advancement in its nearby contracts, which has the feeder cattle market trading anywhere from 107 to 317 points lower. Tuesday's lower downturn has moved the spot January contract back below it's 100-day moving average, and unfortunately, until the market sees support from either the live cattle or cash cattle market or lower corn prices, this lower waning tone could persist. January feeders are down $2.92 at $180.85, March feeders are down $3.05 at $183.32 and April feeders are down $2.87 at $186.65.
LEAN HOGS:
The lean hog complex is in a position much like the cattle sector -- longing for support fundamentally but coming up short thus far in Tuesday's market. February lean hogs are down $2.77 at $87.77, April lean hogs are down $2.22 at $93.60 and June lean hogs are down $1.35 at $105.52. Pork cutout values may be higher at midday, but it's likely that they close lower yet again as the belly has proven time and time again that it's a volatile cut right now with so much product sitting in cold storage. With traders pushing the contracts lower at Tuesday's noon hour, it's seeming as though they're making a statement that, unless the market's fundamentals improve, the resistance at $90.00 is here to stay.
The projected lean hog index for Dec. 5 is up $0.15 at $82.94 and the actual index for Dec. 2 is down $0.08 at $82.79. Hog prices are averaging $82.13 on the Daily Direct Morning Hog Report, ranging from $80.00 to $84.00 on 6,556 head and a five-day rolling average of $84.98. Pork cutouts total 193.26 loads with 179.56 loads of pork cuts and 13.70 loads of trim. Pork cutout values: up $5.74, $92.20.
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