GENERAL COMMENTS:
Sharp losses have quickly redeveloped in cattle futures Thursday morning with aggressive triple-digit losses seen in live cattle and feeder cattle trade through the morning. The release of the November WASDE report added additional pressure to cattle markets, focusing on growing supply levels from the previous month's estimates. The moves lower through the morning have added to previous chart pressure, causing additional technical softness through the entire complex. Lean hog futures are mostly higher during morning trade. Still, the overall tone of the market remains unsettled given the softness in the cattle complex and limited overall activity levels in most lean hog contracts. December corn is down 6 1/2 at $4.695 and December soybean meal is down $0.50 at $449.3. The Dow Jones Industrial Average is down 28.74 at 34,083.53.
LIVE CATTLE :
Live cattle futures were unable to draw any additional buyer support back to the complex following a light to moderate price bounce midweek. The market opened in a bearish tone and continued to weaken through the trading session with nearby contracts $4 to $5 per cwt lower. Additional pressure was in place as the WASDE report was released late morning, increasing expected beef production levels for both 2023 and 2024 from the previous month's estimates. Although overall beef production in 2024 is still expected to remain below current year levels, the fact that this gap is being quickly narrowed could add some additional price pressure to all cattle trade.
Cash cattle started to slowly develop Thursday morning with light trade reported in both the North and South. Trade in the South is reported at $180 to $181 per cwt, mostly $181 per cwt. This is generally $4 per cwt than last week's weighted average. Northern trade is seen at $287 live basis, which is $5 per cwt lower than last week. Asking prices seem to remain firm at this point around $183 in the South and $288 to $289 in the North. More trade is expected to be seen before the end of the week, but it is uncertain if early prices will be enough movement to set the overall tone for cash cattle market this week.
December live cattle are $4.63 lower at $174.775, February live cattle are $5.13 lower at $174.35, April live cattle are $4.60 lower at $177.025.
Boxed beef prices are mixed: choice up $0.30 ($299.05) and select down $0.54 ($270.49) with a movement of 86.68 loads (25.17 loads of choice, 16.75 loads of select, 16.81 loads of trim and 27.95 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures posted sharp losses through the morning with January futures leading the complex lower, falling $6 per cwt through late-morning trade. The focus on larger-than-expected beef production numbers seen in the WASDE report as well as concerns that additional technical pressure are still developing have offset any sense of market stability seen Wednesday. Although establishing new contract lows in nearby feeder cattle contracts is not a significant worry given the prices in 2022, nearby contracts are trading at the lowest prices since May, creating longer-term concerns about the ability to show significant market rebounds in the near future.
November contracts have now fallen $38 per cwt from September highs, which is adding to the concern that noncommercial traders continue to liquidate positions. November feeders are $4.25 lower at $230.3, January feeders are $5.98 lower at $226.8 and March feeders are $5.40 lower at $229.60.
LEAN HOGS:
Lean hog futures have posted light to moderate gains in nearby contracts Thursday morning as buyers slowly redevelop after the midweek price pressure. Very little volume is expected to develop through the rest of the day with most of the attention placed on the tumbling cattle prices. Due to light volume, deferred lean hog futures are showing limited losses, but nearby gains are likely to hold through the end of the session. December lean hogs are $0.48 higher at $71.975, February lean hogs are $0.78 higher at $75.625 and April lean hogs are $0.75 higher at $81.125.
Hog prices are higher on the Daily Direct Morning Hog report, up $0.47 with a weighted average of $69.09, ranging from $64.00 to $71.00 on 1,270 head with a five-day rolling average of $68.56. Pork cutouts totaled 152.83 loads with 134.64 loads of pork cuts and 18.19 loads of trim. Pork cutout values are down $1.54 at $85.46.
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