GENERAL COMMENTS:
From Friday to Friday for the week ending Nov. 10, livestock futures scored the following changes: December Live cattle off $9.70, February Live cattle off $10.58; November Feeder cattle off $10.88, January Feeder cattle off $13.33; December Lean hogs up $0.15, December Lean hogs up $0.15; December Pork cutout up $1.95, December Pork cutout up $1.95.
Livestock trade Friday created a much-needed calming effect on the livestock complex with futures trading mostly mixed at different times in the session, but most importantly, breaking away from the aggressive losses cattle futures realized most of the week. Weekly market moves in cattle futures were horrendous with losses nearing $10 per cwt seen in live cattle futures for the week. Lean hog futures showed signs of positive potential, but just could not develop enough momentum to break out of the sideways pattern seen in the market over the last couple of weeks. Hog prices closed lower on the Daily Direct Afternoon hog report, down $1.06 with a weighted average of $65.95 on 1,436 hogs. December corn closed down 4 at $4.64 and December soybean meal closed down $0.50 at $449.4. The Dow Jones Industrial Average is up 391.16 at 34,283.10.
LIVE CATTLE:
Live cattle futures ended Friday in a narrowly mixed price range although moderate price shifts developed through the entire trading session. Initial follow-through liquidation with previous losses created concern of additional widespread losses, but near midday, limited buying trickled into the market due to sell orders subduing.
The overall lack of direction at the closing bell has little to do with market strength or weakness and more to do with traders quickly becoming absent at the end of the week. The market has become significantly weakened over the week with nearby contracts falling nearly $10 per cwt, creating significant technical damage to market charts. There are concerns of further pressure if adequate buyer support is unable to develop early next week.
Last month's cattle on feed report sparked the overall bearish market shift. Traders are now just one week from the next cattle on feed report, which is being closely monitored for additional market direction.
Cash cattle activity seen on Thursday further developed in the late afternoon and evening. The bulk of cattle sales took place Thursday with prices at $180 to $181, mostly $181 for live southern trade. This is $4 to $5 per cwt lower than last week. Northern trade developed at $285 to $287 dressed basis, a $5 to $7 per cwt loss. A few bids have redeveloped Friday afternoon in Nebraska at $180 live and $287 dressed. Asking prices on cattle left remain at $183 live in the South and $288 dressed in the North. Additional trade will likely be sought before the end of the week, but the pressure in futures trade could quickly cut overall trade interest off with limited cattle sold.
December live cattle closed $0.18 lower at $174.175, February live cattle closed $0.18 higher at $174.65 and April live cattle closed $0.03 lower at $176.925.
Friday's slaughter is estimated at 114,000 head, 8,000 head less than a week ago and 6,000 head less than a year ago. Saturday slaughter is expected at 11,000 head. Weekly estimated slaughter is projected at 607,000 through Friday.
Boxed beef prices closed mixed: choice up $1.04 ($300.46) and select down $2 ($267.42) with a movement of 137.99 loads (97.27 loads of choice, 20.69 loads of select, 6.05 loads of trim and 13.98 loads of ground beef).
MONDAY'S CATTLE CALL: Steady. Given the volatility this week, both sides are expected to be hesitant to step up too early in the week. Activity is likely to be extremely limited on Monday.
FEEDER CATTLE:
Feeder cattle futures posted the most support of any livestock complex on Friday. Nearby contracts traded with triple-digit gains through most of the session, although gains eroded slightly near the closing bell. But even though Friday's gains led the rest of the complex, the feeder cattle market also came into the Friday session with the most aggressive pressure in any livestock market. For the week, feeder cattle futures still posted double-digit losses with November contracts falling nearly $11 per cwt for the week.
The underlying tone of the feeder cattle complex remains extremely weak as traders remain concerned about the potential for additional placement numbers reported in next week's cattle on feed report. November feeders closed $0.73 higher at $229.725, January feeders closed $1.50 higher at $226.425 and March feeders closed $1.38 higher at $228.625. The CME Feeder Cattle Index for Nov. 8: down $1.59, $235.42.
LEAN HOGS:
Light to moderate gains developed in the lean hog complex Friday. The lean hog market continues to get little attention this week due to the aggressive market pressure in the cattle complex and softness developing in other ag commodities.
The ability to secure positive price moves for the week seems like a minor feat, but in comparison, the stability in the market came out as the big market winner for the week. Traders are still concerned about the amount of fundamental support in the near future, which so far has led to nearby markets remaining range-bound with limited long-term direction.
December lean hogs closed $0.45 higher at $71.9, February lean hogs closed $0.38 higher at $75.575 and April lean hogs closed $0.80 higher at $81.525. Friday's hog slaughter is estimated at 452,000 head, 28,000 head less than a week ago and 6,000 head more than a year ago. Week-to-date slaughter is estimated at 2.39 million head with Saturday slaughter estimated at 191,000 head. Pork cutouts totaled 217.03 loads with 193.40 loads of pork cuts and 23.63 loads of trim. Pork cutout values are up $2.48 at $89.42. The CME Lean Hog Index for Nov. 8: up $0.18, $76.87.
FRIDAY'S HOG CALL: Steady to $1 higher. Given the reduced packer schedules this week due to the Veteran's Day Holiday, early cash bids are expected steady to firm early in the week.
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