GENERAL COMMENTS:
Even though cattle prices pulled back from session highs Wednesday, and didn't show the market optimism seen Tuesday, the focus on digging the market out of the price hole seen over the last week has helped to bring additional buyer support to all markets, which previously was content waiting on the sidelines.
Feeder cattle futures led the complex higher midweek, but the break away from active aggressive gains or losses seems to be helping add stability and consistency to the complex. The ability to sustain current gains in both cattle and hog futures through the end of the month will go a long way in helping to change and support the direction of livestock markets through early December, and likely the end of the year.
Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.37 with a weighted average of $58.06 on 8,552 hogs. March corn closed up 2 1/4 at $4.758 and January soybean meal closed down $3.50 at $427. The Dow Jones Industrial Average is up 13.44 at 35,430.42.
LIVE CATTLE:
Live cattle futures shifted higher Wednesday, posting the most aggressive gains early in the trading session as traders followed the upward direction of the feeder cattle complex.
April futures were the only live cattle contract to close with over $1 per cwt gains, but the consistent move higher over the last two sessions is helping draw additional interest into the market. The inability to bring additional support to either the cash cattle market or beef values through the end of the month could create some uncertainty about just how much higher live cattle contracts will be able to go without at least a slight market pullback. But since prices are just slowly recovering from multi-month lows, there is not expected to be significant follow pressure given the current market structure. Cash cattle trade continues with a weaker tone from last week. Light trade has been reported in Nebraska at $275 per cwt. This is $4 per cwt lower than last week's weighted average and is expected to set the tone for week. Southern trade developed the last two days at $173 to $75 per cwt, which is generally $2 per cwt lower than last week.
December live cattle closed $0.25 higher at $171.9, February live cattle closed $0.65 higher at $173.475 and April live cattle closed $1.05 higher at $175.925.
Wednesday's slaughter is estimated at 125,000 head, 1,000 head less than a week ago and 3,000 head less than a year ago. Boxed beef prices closed lower: choice down $1.14 ($297.03) and select down $2.26 ($264.09) with a movement of 137.39 loads (82.65 loads of choice, 37.11 loads of select, 5.94 loads of trim and 11.69 loads of ground beef).
THURSDAY'S CATTLE CALL: Steady with early week trade. The early development of trade this week is likely to set the tone of the market, limiting upward price movement through the end of November.
FEEDER CATTLE:
The feeder cattle contracts closed higher, but well below session highs. The limit gains Tuesday helped to stimulate additional upward movement in the complex, but the fact that prices are coming off multi-month, and nearly contract lows seems to be little support to a market, which has fallen over $50 per cwt in the last three months. But buyer support seems to still be available, although it is uncertain just how much end of the month buyer activity will develop Thursday.
January feeders closed $1.15 higher at $222.2, March feeders closed $0.78 higher at $224.275 and April feeders closed $0.90 higher at $228.325. The CME Feeder Cattle Index for Nov. 27: down $4.71, $222.25
LEAN HOGS:
Lean hog futures posted firm gains at the end of the session Wednesday with steady but firming buyer interest moving into all nearby contracts. The focus on pushing prices higher at the end of the month is creating some additional technical support through the market, although prices remain extremely oversold after coming off contract lows earlier in the week.
December lean hogs closed $0.05 higher at $68.975, February lean hogs closed $1.08 higher at $70.10 and April lean hogs closed $1.48 higher at $76.475. Wednesday's hog slaughter is estimated at 484,000 head, 2,000 head less than a week ago and 2,000 head less than a year ago. Pork Cutouts totaled 324.84 loads with 269.34 loads of pork cuts and 55.50 loads of trim. Pork cutout values are down $0.83 at $83.97. The CME Lean Hog Index for Nov. 27: down $0.67, $71.66.
THURSDAY'S HOG CALL: Steady. Limited additional market support is likely to be seen early Thursday, although there could be some end of the week buying activity as packers prepare for early December plant schedules.
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