GENERAL COMMENTS:
There is a sense in the livestock complex that futures markets are in the calm before the storm, and the pending potential storm is Friday's Cattle on Feed report. Although cattle futures are holding gains around $1 per cwt at midday, the volatility market swings through the week seem to have created some growing uncertainty of not only what traders expect in the report, but how much of expected moves have already been adjusted into market prices. Increased cattle placements and on-feed numbers are expected in the report, but it would be fair to say that a portion of this bearish news has already been factored into the market over the last couple of weeks. Hog futures on the other hand are mostly higher, but hovering within a narrowly mixed trading range with very little further direction expected to develop before the end of the week.
December corn is down 6 at $4.688 and December soybean meal is down $10.60 at $456.2. The Dow Jones Industrial Average is down 17.11 at 34,928.36.
LIVE CATTLE:
Firm gains have moved into live cattle futures with all contracts trading at or above $1 per cwt at midday. The focus on the upward market support has more to do with traders adjusting to Thursday's sharp losses as traders continue to make last-minute position shifts in front of the cattle on feed report. The memories of last month's cattle on feed report are so fresh in traders' and cattlemen's minds that there seems to be a sense of PTSD when it comes to the release of the November Cattle on Feed report.
Analysts expect overall on-feed numbers will be higher than last year, but just how high is the question. It appears that the volatility over the last several days has a portion of these expected gains already priced into the market, but unfortunately, we will not know the full answer until markets open next Monday morning.
Cash cattle trade for the week appears to be essentially done following light to moderate activity seen Wednesday and Thursday. There could be some additional clean up activity, but the looming cattle on feed report may limit additional interest on both sides through the end of the week. Southern trade was reported sold at mostly $178 per cwt, $2 to $3 per cwt lower than last week's weighted average. Northern dressed trade was set with Wednesday trade at $282 per cwt, $4 per cwt lower than last week's weighted average.
December live cattle are $1.03 higher at $175.775, February live cattle are $1.35 higher at $176.675, April live cattle are $1.15 higher at $178.25
Boxed beef prices are mixed: choice down $0.94 ($293.78) and select up $2.21 ($269.86) with a movement of 56.74 loads (38.65 loads of choice, 4.25 loads of select, 2.98 loads of trim and 10.86 loads of ground beef).
FEEDER CATTLE:
Light to moderate buyer support slowly developed in feeder cattle futures Friday morning with traders covering short positions seen Thursday. The tone of the market remains under pressure with traders still concerned about the amount of placements reported in Friday afternoon's cattle on feed report. However, a portion of these increases are expected to have already been factored into current price levels.
It is not uncommon for cattle placement levels to be at the highest level of the year during October placements, but the significant increases over the past two months from 2022 levels continues to create concern that supply levels will not remain nearly as tight as previously expected. The placement number is likely to be the focus of the afternoon cattle on feed report, which could easily dictate market direction through much of the holiday shortened trading week next week.
January feeders are $0.98 higher at $228.475, March feeders are $0.90 higher at $231. and April feeders are $0.65 higher at $234.35.
LEAN HOGS:
Lean hog futures are extremely quiet with limited overall movement across all contract months. Prices are mixed within a narrow trading range as narrow losses in nearby contracts are being offset by limited deferred market gains. Very little new direction is seen in both technical market factors and pork market fundamentals, which could continue to limit overall movement direction and keep lean hog prices within the moderate but sideways trading range seen through the last month. December lean hogs are $0.23 lower at $71.25, February lean hogs are $0.03 lower at $75.6 and April lean hogs are $0.03 lower at $81.425.
Hog Prices are lower on the Daily Direct Morning Hog report, down $1.85 with a weighted average of $62.27, ranging from $59.00 to $70.00 on 4,583 head with a five-day rolling average of $63.52. Pork Cutouts totaled 158.54 loads with 143.75 loads of pork cuts and 14.79 loads of trim. Pork cutout values are down $1.21 at $84.97.
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