GENERAL COMMENTS:
Traders are focusing on the development of buy orders in the market during early week trade. Little to no fundamental changes were seen over the weekend across the complex, but the aggressive cattle market losses last week left the complex oversold. Even though prices remain extremely weak based on recent chart moves, the potential for follow-through gains remains strong and could help to support price levels through the early part of the week. Lean hog futures are slightly more supported, given the underlying firm tone developing in nearby lean hog charts. Due to firm, triple-digit gains in nearby lean hog trade, contracts have broken through short-term resistance levels set during early November. December corn is up 10 3/4 at $4.748 and December soybean meal is up $25.00 at $474.4. The Dow Jones Industrial Average is up 114.23 at 34,397.33.
LIVE CATTLE:
Firm gains are seen in live cattle futures Monday morning with spot December contracts leading the upward market move, although concern about whether current buyer support will hold through both Monday's session and during the week may lead to moderate price shifts over the coming days. Traders have pulled away from session highs at midday, but the potential to bring back late-day support could help stabilize the market. With markets moving to six-month lows last week, significant negative market tones remain across all contracts, while traders look for additional short- and long-term direction. Cash cattle markets remain at a standstill, which is well expected for a Monday morning. The limited but welcomed support in futures trade is helping regain some limited cash market support. But at this point there is still no indication of asking prices or bids. Given the pattern of the last few weeks, active cash trade may be delayed until the last half of the week. The release of the November Cattle on Feed report on Friday afternoon could further delay active cash market trade. December live cattle futures are $1.18 higher at $175.35, February live cattle futures are $0.78 higher at $175.425, April live cattle futures are $0.88 higher at $177.8. Boxed beef prices are mixed: choice down $0.48 ($299.98) and select up $1.74 ($269.16) with a movement of 46.79 loads (17.59 loads of choice, 17.36 loads of select, 3.85 loads of trim and 7.99 loads of ground beef).
FEEDER CATTLE:
Follow-through gains have quickly developed in feeder cattle trade Monday morning. The feeder cattle complex is leading the entire market higher with gains through the morning sustaining triple-digit support ranging from $1.30 to $2.40 per cwt at certain times during morning trade. The potential to rebuild off last week's market lows is helping bring a sense of solid market support back into the complex, although traders still remain concerned about the ability to sustain long-term support. Attention across the cattle complex will be firmly placed on the upcoming Cattle on Feed report which will be released Friday. Seasonal patterns indicate placement levels would be higher than year ago levels, but given the surprise in October, there could be some unforeseen surprises in this report that keep markets volatile. November feeders are $1.30 higher at $231.025, January feeders are $1.85 higher at $228.275 and March feeders are $1.68 higher at $230.3.
LEAN HOGS:
Firm gains developed across all lean hog futures contracts Monday morning. The ability to spark follow-through buyer support after Friday's positive close and draw renewed technical and fundamental support back into the complex sparked triple-digit gains in nearby contracts. The firm support in December contracts has moved through resistance levels set in early November. A close above $73.27 per cwt in December contracts would indicate the ability to break through short-term resistance levels and set a November high. This could help support additional technical buying, but given current pork supplies, it may be hard to quickly and aggressively expand the short-term price range significantly without firm outside market support. December lean hogs are $1.40 higher at $73.30, February lean hogs are $1.30 higher at $76.875 and April lean hogs are $0.88 higher at $82.40.
Cash hog prices are unreported due to confidentiality on the Daily Direct Morning Hog report. Pork cutouts totaled 359.12 loads with 333.15 loads of pork cuts and 25.97 loads of trim. Pork cutout values are up $3.73 at $89.29.
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