GENERAL COMMENTS
It was a mostly supportive day for the livestock complex as traders are eager to trade the contracts higher, but they do want to see more fundamental support. The cash cattle market is expected to see more interest come Thursday, and prices are expected to be higher. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.80 with a weighted average of $76.00 on 9,002 head. March corn is up 8 cents per bushel and March soybean meal is up $13.50. The Dow Jones Industrial Average is down 365.85 points.
LIVE CATTLE:
The cash cattle market closed higher in nearly all of its contracts, besides the February 2023 and April 2023 contracts. The market seems to be chomping at the bit, ready to bust higher after the New Year, but the early contracts of 2023 seem to be uninterested or unresponsive with the market's strong fundamental footing. It's encouraging to see both today's and yesterday's slaughter as aggressive as they are as keeping showlists current will help feedlots maintain leverage in the early half of the upcoming year. February live cattle closed $0.07 lower at $157.80, April live cattle closed $0.05 lower at $161.77 and June live cattle closed $0.27 higher at $157.95. The cash cattle market didn't see any interest throughout the day as packers are rolling their eyes with disgust that feedlots are again wanting higher prices. Prices are expected to higher come Thursday when the cash market does begin to trade. Asking prices in the South are noted at $158 and in the North at $256.
Wednesday's slaughter is estimated at 128,000 head, 6,000 head more than a week ago and 10,000 head more than a year ago.
Boxed beef prices closed mixed: choice down $0.63 ($279.41) and select up $1.64 ($247.28) with a movement of 102 loads (52.74 loads of choice, 22.43 loads of select, 9.26 loads of trim and 17.20 loads of ground beef). The choice/select spread sits at $32.13.
THURSDAY'S CATTLE CALL: $1.00 to $2.00 higher. With feedlots current and packers wanting to run vigorous chain speeds to ensure they can sell product at these high box prices; they'll likely support this week's cash market.
FEEDER CATTLE:
The feeder cattle complex had a bit of a rebounding day as the market was able to close 5 to 92 points higher amid a corn complex which pushed its nearby contracts $0.06 to $0.08 higher. The market felt the ramification of Friday's mixed message in placements throughout Tuesday's market, but given all the bullish factors illuminating the cattle market, feeders didn't want to trade lower two days in a row. January feeders closed $0.37 higher at $183.47, March feeders closed $0.80 higher at $186.20 and April feeders closed $0.37 higher at $189.50. So long as the cash cattle market does indeed trade higher tomorrow, the feeder cattle complex should be able to maintain its higher front, so long as the corn market doesn't jolt higher. The CME Feeder Cattle Index for Dec. 27: up $0.35, $176.08.
LEAN HOGS:
The lean hog complex closed mixed as it fought some internal warfare as the market desperately wants to continue to trade higher, but traders equally want to see support from the market's fundamentals. February lean hogs closed $0.67 lower at $90.80, April lean hogs closed $0.12 higher at $96.57 and June lean hogs closed down $0.05 lower at $108.87. The cash hog market saw lower prices yet again reported Wednesday afternoon, and the day's volume wasn't anything to get excited over. With packers having ample supplies in cold storage, their need to chase the cash market is extremely limited. Pork cutout values also closed lower with the belly seeing the biggest day over day decline as it fell $9.83 lower. Pork cutouts total 340.89 loads with 309.69 loads of pork cuts and 31.20 loads of trim. Pork cutout values: down $2.25, $88.67. Wednesday's slaughter is estimated at 490,000 head - 40,000 head more than a week ago and 17,000 head more than a year ago. Tuesday's hog slaughter was revised to 482,000 head. The CME Lean Hog Index for Dec. 26: down $0.14, $78.60.
THURSDAY'S HOG CALL: Somewhat higher. Packers have been lackadaisical all week in the cash market. They'll either get slightly more aggressive in Thursday's market or wait until after the New Year to really procure hogs.
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