Monday Midday Livestock Market Update - Early Gains Soften With Limited Trade Activity

GENERAL COMMENTS:

Initial buyer support seemed to quickly and actively build through the weekend following lower-than-estimated cattle placements on Friday's Cattle on Feed report. This essentially took most of the negative sting out of the highly anticipated report and sparked a slew of buy orders once markets opened Monday morning. Feeder cattle futures were the most aggressive in early morning trade with gains reaching over $2 per cwt in several contract months. But the overall lack of active trade due to the Thanksgiving holiday week and limited follow-through buying quickly allowed for prices to retract early gains. Live cattle and feeder cattle futures are holding moderate to firm losses, although overall activity levels and market movement are likely to remain subdued through most of the session. Lean hog futures are trading lower in a narrow range with very limited direction in the complex. The underlying softness in cash hog and pork values continue to limit buyer support. But hog markets seem to remain extremely comfortable within the current sideways trend. December corn is down 1 1/2 at $4.655 and December soybean meal is down $1.30 at $452.00. The Dow Jones Industrial Average is up 102.47 at 35,049.75.

LIVE CATTLE:

Live cattle futures have seen a flurry of back-and-forth market shifts Monday morning as initial buyer orders met opening bell with an optimistic focus following buyers stepping back into the market after last Friday's Cattle on Feed report. With overall on-feed cattle numbers at 11.9 million head, essentially on target with pre-report estimates, traders started to back away from the protection put into the market last week before the report was released. But these early gains were not able to hold, as futures quickly moved steadily lower, and spent a portion of the morning trading with firm losses. But these losses are starting to now fade as sell orders are thinning out, allowing prices to remain mixed in sluggish activity at midday. This holiday-shortened trading week will likely see mixed market direction through the entire week with many traders likely content with positions until early next week. Cash cattle markets are quiet Monday morning with asking prices and bids unlikely to be seen until either later in the day or later in the week. Given the holiday schedule at the end of the week, packers are expected to want cash trade wrapped up on Wednesday, but overall movement during the week will also be uncertain, especially until more accurate cattle sale numbers from last week are reported later Monday. December live cattle are $0.43 lower at $175.325, February live cattle are $0.55 lower at $176.25, April live cattle are $0.13 lower at $178.30. 

Boxed beef prices are higher: choice up $2.28 ($296.15) and select up $1.71 ($272.41) with a movement of 69.25 loads (51.51 loads of choice, 10.31 loads of select, zero loads of trim and 7.43 loads of ground beef).

FEEDER CATTLE:

Moderate to wide price swings developed in feeder cattle futures Monday morning. First, the upcoming holiday week is expected to limit overall trade volume through the next several days, meaning less overall market interest and potential room for markets to show more significant price swings due to lack of activity. But post-report buying flooded the complex, posting strong, triple-digit gains across the complex with several contracts reaching gains of $2 per cwt. This buyer support was partially based on cattle placements in October lower than expected, which traders had already factored into price levels last week. But with only limited buy orders needed to be filled, prices quickly eroded during morning trade, holding moderate to firm losses. These active sell orders were relatively thin also, leading the way for prices to trudge higher at midday. The rest of the week could see similar trade as Monday morning's moves based on the limited overall volume as prices could wander back and forth through much of the holiday week. January feeders are $0.03 lower at $228.475, March feeders are $0.13 higher at $231.1 and April feeders are $0.23 higher at $234.725.

LEAN HOGS:

Follow-through pressure is seen in lean hog futures trade Monday morning. The underlying concern of recent erosion in cash hog values as well as the inability to consistently and steadily move pork cutout values higher ahead of the Thanksgiving holiday is keeping buyers on the sidelines in most futures contracts. Nearby futures still remain well contained within a sideways trading pattern, which is not expected to be in danger at this point, but the inability to develop a strong sense of fundamental support over the next couple of weeks could quickly limit overall lean hog values and buyer support through the end of 2023. December lean hogs are $0.53 lower at $70.45, February lean hogs are $0.35 lower at $75.1 and April lean hogs are $0.43 lower at $81.025.

Hog prices are unreported due to confidentiality on the Daily Direct Morning Hog report. Pork cutouts totaled 176.18 loads with 155.53 loads of pork cuts and 20.65 loads of trim. Pork cutout values are up $2.79 at $87.76.