Thursday Midday Livestock Market Summary - Active Price Gains Rekindle Buying Interest

GENERAL COMMENTS:

Strong triple-digit gains flooding into feeder cattle and lean hog futures has helped to spark renewed buyer support across the livestock market. The focus on firm outside market support based partially on job growth seems to have dampened the doom and gloom side of the market, at least for the short term, allowing the oversold livestock market to quickly shift higher during Thursday morning trade. Nearby feeder cattle futures are trading over $3 per cwt higher, and pushing prices above $240 per cwt. These markets are still well below where price levels were a month ago, but more focus is once again being placed on overall product growth and demand, rather than supply concerns. Hog futures quickly bounced back from midweek losses as traders regain the optimistic views which has helped to draw buyers into the market over the last week. December corn is down 1 1/4 at $4.738 and December soybean meal is down $3.00 at $427.4. The Dow Jones Industrial Average is up 366.08 at 33,640.66.

LIVE CATTLE :

Firm gains have continued to develop in live cattle futures Thursday morning. Strong triple-digit gains seen in feeder cattle futures has spilled over to the live cattle complex with deferred contracts leading the market higher during morning trade. There remains some underlying concern regarding if beef values can continue to shift higher during the next few weeks, but traders look for increased underlying support from growth in holiday demand. In the weekly export and sales report, net beef sales of 17,400 mt for 2023 were up noticeably from the previous week and up 72 percent from the prior four-week average. Increases primarily for South Korea (9,300 mt, including decreases of 400 mt), China (3,200 mt, including decreases of 200 mt), Japan (2,200 mt, including decreases of 200 mt) highlighted the report. Exports of 13,800 mt were up 1% from the previous week, but down 8% from the prior four-week average. Cash cattle trade remains elusive with asking prices holding firm at $188 in the South and $294 in the North. A few bids have developed through the morning in Nebraska at $290 to $291 dressed basis, but at this point in the week feeders seem very uninterested. A few cattle were reported sold in the South Wednesday at $185 per cwt, which is not enough to set a market tone, but still evidence that steady to positive price moves are expected through the end of the week. If the futures market support continues, it is likely that feeders will carry this bullish focus into end of the week negotiations. December live cattle are $0.98 higher at $184.6, February live cattle are $1.10 higher at $186.275, April live cattle are $1.10 higher at $188.65.

Boxed beef prices are lower: choice down $2.51 ($302.67) and select down $0.76 ($278.74) with a movement of 96.00 loads (44.62 loads of choice, 18.94 loads of select, 9.57 loads of trim and 22.89 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have led the complex higher with active gains seen in all contract months. Deferred futures are showing the most support, reporting gains over $3 per cwt through November through April contracts. Very little has changed fundamentally in the feeder cattle complex, but the further prices move from recent market lows, technical support is slowly but steadily being built in the complex. Although prices are still well below any significant resistance level that would point to a market pullback in the complex, it would not be surprising if a light to moderate correction developed in the coming days based on lack of volume more than a change of market direction. The lack of sellers willing to stand in the way of quickly rising prices Thursday morning is helping to regain market support. November feeders are $3.75 higher at $242.325, January feeders are $3.85 higher at $241.875 and March feeders are $3.68 higher at $244.00.

LEAN HOGS:

Strong upward market gains have quickly developed in lean hog trade during the morning with December futures holding a $3 per cwt rally at midday. The wide market swings seen Wednesday indicate just how quickly trade direction and price moves can shift, but the overall focus on rebuilding market support continues to be a deeper theme in the hog complex that is likely to help bring additional buyer support to the market over the near future. Traders are looking for additional confirmation from not only additional price support in cash hogs during early November, but also the ability to sustain firm gains in pork prices. In the weekly pork export and sales report, net sales were reported of 28,200 mt for 2023, down 8% from the previous week and from the prior four-week average. Increases were primarily for Mexico (10,200 mt, including decreases of 200 mt), China (3,400 mt, including decreases of 100 mt), Canada (3,200 mt, including decreases of 600 mt), Japan (2,900 mt, including decreases of 400 mt), and South Korea (2,600 mt, including decreases of 700 MT). Exports of 27,700 mt were up 7% from the previous week, but down 1% from the prior four-week average. December lean hogs are $3.00 higher at $73.15, February lean hogs are $2.80 higher at $76.25 and April lean hogs are $2.33 higher at $81.425.

Hog Prices are lower on the Daily Direct Morning Hog report, down $0.61 with a weighted average of $69.82, ranging from $65 to $72 on 2,010 head with a five-day rolling average of $70.11. Pork Cutouts totaled 139.86 loads with 117.96 loads of pork cuts and 21.90 loads of trim. Pork cutout values are down $0.84 at $85.64.