GENERAL COMMENTS:
From Friday to Friday, livestock futures scored the following changes: December Live cattle up $1.83, February Live cattle off $0.82; January Feeder cattle up $1.85, March Feeder cattle up $2.22; February Lean hogs off $0.55, February Lean hogs off $0.55; February Pork cutout up $0.00, April Pork cutout up $0.05.
Pre-holiday and pre-report market shifts developed Friday, allowing for mixed to mostly higher price moves during the Friday session. Nearby live cattle futures posted limited losses, while deferred contracts moved slightly higher. The main support was seen in feeder cattle trade as traders focused on the Friday afternoon report release.
With cattle on feed numbers and placement numbers coming in slightly higher than traders expected in pre-report estimates, it is expected that some uncertainty may continue to develop early next week once markets reopen.
Hog futures bounced higher as traders covered short positions seen earlier in the week, but volume in the hog market also remained extremely light heading into Christmas weekend.
Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.20 with a weighted average of $47.76 on 2,036 hogs. March corn closed up 1/2 at $4.73 and March soybean meal closed up $4.70 at $391.1. The Dow Jones Industrial Average is down 18.38 at 37,385.97.
LIVE CATTLE:
Live cattle futures ended mixed in a narrow trading range Friday afternoon as traders focus on the impact of the cattle on feed report and limited expected trade volume once markets reopen Tuesday.
The cattle on feed report posted larger-than-expected cattle in nations feedlots, creating a generally weaker tone to the market following the report. It is still uncertain just how much of this increase has been factored into prices, as a large portion of the higher supply level has been impacting live cattle prices over the past few weeks. Total cattle numbers in feedlots moved above 12 million head for the first time since April 2022. The fact that cattle on feed numbers continue to grow may be the biggest concern to traders in the coming days.
Cash cattle trade has started to develop through the day Friday. Trade in the south is reported at $171 per cwt live basis, which is $1 per cwt higher than last week's weighted average. Northern trade is seen at $171 to $172 live and $271 per cwt dressed. Dressed trade is $3 per cwt higher than last week. There may be some additional sales trickling in through the early evening, but most of the needed trade seems to have been accomplished.
December live cattle closed $0.50 lower at $170.05, February live cattle closed $0.15 lower at $168.525 and April live cattle closed $0.05 lower at $172.125.
Friday's slaughter is estimated at 117,000 head, 4,000 head less than a week ago and 21,000 head more than a year ago. Saturday slaughter is estimated at 7,000 head. Week to date slaughter totals are expected at 621,000 head.
Boxed beef prices closed mixed: choice up $1.80 ($292.93) and select down $0.12 ($261.15) with a movement of 89.97 loads (51.32 loads of choice, 15.27 loads of select, 11.67 loads of trim and 11.71 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. Limited activity is expected early next week following the Christmas break. Tuesday will likely be focused with show list distribution and inventory taking ahead of another sluggish week and holiday weekend.
FEEDER CATTLE:
Feeder cattle futures posted strong triple-digit gains through early afternoon with buyers focusing on covering short positions ahead of the long holiday weekend and upcoming report. Nearby gains closed $1 per cwt higher with limited volume seen through the entire complex.
The release of the cattle on feed report was only partially positive in the fact that for the first time in three months, placement levels were not above year ago levels. But cattle placements were larger than most expected, falling only 2% from year ago levels, while most expected the decrease to be closer to 4 to 5%. This is expected to have a weakening impact to the market early next week, although the uncertainty lies in the fact that it is still uncertain just how much of the weakness was already put into the market due to caution.
Limited trade is expected all next week between Christmas and New Year's. This could also add increased volatility to the market due to light trade volume.
January feeders closed $1.05 higher at $222.75, March feeders closed $1.03 higher at $224.4 and April feeders closed $1.08 higher at $229.525. The CME Feeder Cattle Index for Dec. 20: up $0.01, $219.81.
LEAN HOGS:
Lean hog futures bounced higher Friday as traders adjusted positions heading into the long holiday weekend and in front of the hogs and pigs report. Even though significant inventory levels were not expected, the fact that overall hog inventory increased slightly instead of decreasing is expected to create a weaker tone to the market once traders return Tuesday following Christmas celebrations.
A moderate reduction in hogs kept for breeding and the expectation that the industry will slowly but steadily work itself out of the heavy supply situation in the next two to three quarters, gives hope for long-term support. However, this may not help support short-term price levels in either the futures or pork markets, especially during the lightly traded holiday season.
February lean hogs closed $0.70 higher at $71.35, April lean hogs closed $0.63 higher at $77.575 and May lean hogs closed $0.40 higher at $83.95. Friday's hog slaughter is estimated at 434,000 head, 34,000 head less than a week ago and 324,000 head more than a year ago. Saturday slaughter is estimated at 61,000 head. Week to date slaughter is estimated at 2.42 million head. Pork Cutouts totaled 318.75 loads with 291.06 loads of pork cuts and 27.69 loads of trim. Pork cutout values are up $0.86 at $82.21. The CME Lean Hog Index for Dec. 20: up $0.15, $66.69.
TUESDAY'S HOG CALL: Steady to $1 lower. A combination of light holiday activity and two back-to-back long holiday weekends, packers are expected to be able to put even more pressure on cash hog values early next week.
No comments:
Post a Comment