GENERAL COMMENTS:
Thursday turned into a dismal day across the cattle complex with aggressive triple-digit losses flooding back into live cattle and feeder cattle contracts with no sense of market stability in sight. Feeder cattle contracts led the plunge lower, falling nearly $8 per cwt in nearby contracts, as technical market weakness is the main driving point to the most recent move lower. Live cattle futures mirrored the market negativity with $5-per-cwt losses by the time markets closed Thursday afternoon. Even though hog markets were much more optimistic, early gains were quickly eroded, as futures closed mixed but within a very narrow trading range. In the latest WASDE report released Thursday morning, beef production forecasts were increased, focusing on larger cattle placements in the last half of 2023. This did moderately decrease projected beef production through the end of 2023 but significantly increased expected beef production in 2024. These higher production estimates added insult to injury in cattle futures through the end of the day. Hog prices closed lower on the Daily Direct Afternoon hog report, down $1.26 with a weighted average of $67.01 on 2,388 hogs. December corn closed down 8 at $4.68 and December soybean meal closed up $0.10 at $449.9. The Dow Jones Industrial Average is down 220.33 at 33,891.94.
LIVE CATTLE:
Despite the sliver of hope seen in the cattle complex Wednesday with higher prices midweek, the bearish market freefall continued Thursday, adding to an already bearish market structure and creating concerns of further price pressure in the near future. The move lower quickly sparked follow-through liquidation from all sides, causing nearby contracts to tumble over $5 per cwt in nearby contracts. December live cattle futures have now fallen $10 per cwt in the last week, creating significant concerns across the complex. Beef production was adjusted significantly higher for 2024 from the October report in the morning WASDE report. Given the expected increases in production, additional market weakness may still be developing. Cash cattle trade started to develop Thursday late morning with additional activity trickling into the market through the afternoon. Cattle sales were reported at $180 to $181 live basis in the South with most trade seen at $181 per cwt. This is $4 per cwt lower than last week's weighted average price. Northern trade was seen at $287 dressed basis and a few live trades at $180 in western Nebraska. Northern trade is generally $5 per cwt lower than last week's weighted average price. Asking prices on cattle left remain at $183 live in the South and $288 dressed in the North. It is likely that additional trade will 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 $5.05 lower at $174.35, February live cattle closed $5 lower at $174.475 and April live cattle closed $4.68 lower at $176.95.
Thursday's slaughter is estimated at 122,000 head, 2,000 head less than a week ago and 7,000 head less than a year ago.
Boxed beef prices closed mixed: choice up $0.67 ($299.42) and select down $1.61 ($269.42) with a movement of 133.11 loads (49.46 loads of choice, 31.60 loads of select, 19.59 loads of trim and 32.46 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady with Thursday's trade. Light trade starting to develop Thursday pushed prices $4 to $5 per cwt lower than last week's average. This is not surprising given the underlying pressure across the market.
FEEDER CATTLE:
Feeder cattle futures led the entire complex lower with nearby contract losses at nearly $8 per cwt. Markets did not close at daily trading limits, which will keep market limits unchanged Friday morning at $8.25 per cwt in the feeder cattle complex. The underlying technical weakness is leading the widespread liquidation across the market, but this pressure is also sparking some additional fundamental market concerns, which may be seen through the upcoming weeks if not longer. Spot November feeder cattle contracts have fallen $39 per cwt since the September seasonal high. This not only remains bearish for the market but is limiting interest from buyers who are unwilling to step into a lower moving market. November feeders closed $5.55 lower at $229, January feeders closed $7.85 lower at $224.925 and March feeders closed $7.75 lower at $227.25. The CME Feeder Cattle Index for Nov. 7: down $1.12, $237.01.
LEAN HOGS:
Despite holding moderate gains through most of the trading session, lean hog futures ended the day mixed within a narrow trading range. The developing pressure in cattle trade was just too much pressure to keep buyers actively involved in any livestock market, allowing for softness in the last two hours of trade Thursday. The focus on fundamental market support is keeping traders from stepping away from the market, but this could lead to additional market volatility at the end of the week. December lean hogs closed $0.05 lower at $71.45, February lean hogs closed $0.35 higher at $75.20, and April lean hogs closed $0.35 higher at $80.725. Thursday's hog slaughter is estimated at 469,000 head, 18,000 head less than a week ago and 26,000 head less than a year ago. Pork cutouts totaled 299.82 loads with 260.18 loads of pork cuts and 39.64 loads of trim. Pork cutout values are up $0.36 at $86.94. The CME Lean Hog Index for Nov. 7: up $0.42, $76.69.
FRIDAY'S HOG CALL: Steady to $1 lower. The combination of general market weakness as well as reduced plant schedules due to Veterans Day will likely create steady to lower cash offerings at the end of the week.
No comments:
Post a Comment