GENERAL COMMENTS:
The tone of the livestock markets was mostly lower by the end of the trading session on Wednesday, although not with enough energetic selling to significantly alter the charts. Wednesday afternoon's cash cattle trade saw steers and heifers trade in Texas and Kansas at $177 (live basis), with a few go cheaper at $175 and $176. Nebraska steers went for $177 live or $280 on a dressed basis. That was mostly steady with last week's prices.
The National Direct Afternoon Hog Report showed negotiated swine prices down $1.84 to a weighted average of $59.19 on 3,827 head. Prices ranged from $55 to $63, and the five-day rolling average is now $62.97. December corn moved down 1 1/4 cents to $4.68 3/4 per bushel and December soybean meal closed down $1.10 per ton to $458.10. The Dow Jones Industrial Average was up 184.74 points and the NASDAQ was up 67.77 points.
LIVE CATTLE:
When boxed beef prices have been falling like turkeys dropped out of a helicopter, the live cattle market is going to struggle to move higher. Futures prices had mixed success at staying airborne through most of Wednesday's session until the pre-holiday sell-off right at the end. The December contract closed down $0.525 at $174.475; the February contract closed down $0.80 at $175.275, and the April contract closed down $0.575 at $177.65. There does seem to be some support on the December chart to keep nearby futures prices above $173 in recognition of the overall tightness of supply-and-demand in this market, regardless of the day-to-day wrangling about how much profit packers can make or pass on to the feedlots.
Wednesday afternoon's cash cattle business, done before the Thanksgiving holiday, saw prices mostly steady with last week at $177 live basis in the South or $280 dressed basis in the North.
Both choice and select boxed beef prices have been falling overall through the month of November so far, still waiting for an expected seasonal shift in momentum. Boxed beef prices were mixed Wednesday: choice up $1.19 ($297.00) and select down $1.15 ($267.62), with a movement of 170 loads (114.65 loads of choice, 29.84 loads of select, 11.23 loads of trim and 13.96 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. There doesn't seem to be enough outside influence yet one way or another to break this market out of its comfortable trading range.
FEEDER CATTLE:
Steady prices for corn as the 2023 North American harvest wraps up and volatility for soybeans and soybean meal as the South American crops face uncertainty may prevent feeder cattle futures traders from getting too confident or aggressive in either direction. At the end of the Wednesday session, the January feeder cattle contract was down $1.20 at $227.125, the March contract down $1.10 at $230.125, and the April contract was down $1.00 at $233.90. There was unsurprisingly a pretty low volume of futures trade during this session before a big travel holiday, and most of the price movement occurred toward the end of the session as traders closed out positions. Out in the countryside, too, many cattle sale barns are pausing their weekly auction schedules for Thanksgiving. Otherwise, it's the time of year when the sale barns see large volumes of calves coming through with well-tested prices, and despite the recent slump on the futures chart, the actual values being traded for, say, 600-lb steers in the North remain historically strong at $260 or better. The CME Feeder Cattle Index for Nov. 20 is $226.76.
LEAN HOGS:
In anticipation of the traditional turkey day holiday, which happens to feature a lot of hams being served on dinner tables instead of turkey or alongside turkey, traders might have expected more enthusiasm for lean hog futures trade Wednesday.
The December lean hog contract closed up $0.10 at $68.275; the February contract closed down $0.50 at $71.825; and the April contract closed down $0.05 at $78.575.
The poultry industry's production volumes continue to be threatened by HPAI during wild birds' migration season, and there is some possibility that the pork industry could benefit as a substitution in grocery shoppers' carts. However, turkey prices will lag in their response to production challenges, and the more immediate influence on pork prices will be the lackluster prospects for exporting U.S. abundant supplies, especially when China is also awash with their own supplies. The afternoon pork cut-out showed the overall carcass value down $0.53 to $84.68, with 336.26 total loads (307.51 loads of cuts and 28.75 loads of trim). The CME Lean Hog Index for Nov. 17: down $0.57, $74.52, and the projected Index for Nov. 20: down $0.34, $74.18.
FRIDAY'S CASH HOG CALL: Steady to $1 higher. Once past the holiday, packers may want to resume a regular slaughter pace.
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