GENERAL COMMENTS:
Moderate to firm price support is seen in feeder cattle and lean hog futures, each of which are partially focused on covering short positions following the firm pressure seen Thursday in cattle trade, and consistent hog market pressure during the week.
Light volume is the key factor of morning trade Friday, with a portion of traders already exiting the market ahead of the holiday weekend. There is expected to continue to be some limited position adjustments ahead of Friday afternoon's cattle on feed and hogs and pigs report. But for the most part, any needed position shifts have likely already been made.
Following the report, traders will not have access to trade the report information until Tuesday morning, which will give ample time to mull over and second guess potential market direction and main takeaways over Christmas dinner. But for the most part, the rest of the trading day is expected to remain generally calm and uneventful. March corn is down 1/2 at $4.72 and March soybean meal is up $3.30 at $389.70. The Dow Jones Industrial Average is up 64.48 at 37,468.83.
LIVE CATTLE:
Live cattle trade remains generally quiet with prices mixed in a very narrow trading range. Although firm gains have developed in feeder cattle trade during Friday morning, very little follow-through interest has developed in live cattle contracts. Lightly traded and soon to expire December contracts are posting a moderate loss, while other nearby contracts have been able to inch higher, although single-digit gains have been seen through the morning in a couple of nearby contract months.
It appears that traders seem comfortable with current positions in front of Friday's Cattle on Feed report. Pre-report estimates projected a 2.2% increase in on feed numbers from a year ago. This estimate seems to be the tipping point, as an on-feed number above this level will account for a gain from November levels, and the highest on feed numbers since May 2022. But for now at least, traders seem to be generally confident and in consensus that market expectations should represent the report findings.
Cash cattle trade has started to slowly develop in the North with light trade reported at $271 per cwt on a dressed basis. These prices are $3 per cwt higher than last week's weighted average price, and are a welcome sign following the consistent moves lower over the past few weeks. Live trade is not yet developing, but bids are still being passed in all areas at $170 per cwt. Currently asking prices remain at $173 to $175 per cwt live basis and $272 and higher on dressed cattle that have not yet been sold. It very well could be late Friday afternoon and after the 2 p.m. report release before cash cattle trade wraps up heading into the Christmas holiday.
March corn is down 1/2 at $4.72 and March soybean meal is up $3.00 at $389.4. The Dow Jones Industrial Average is up 49.77 at 37,454.12.
Boxed beef prices are higher: choice up $1.05 ($292.18) and select up $1.63 ($262.90) with a movement of 60.12 loads (39.18 loads of choice, 6.01 loads of select, 8.03 loads of trim and 6.90 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures have consistently moved higher Friday morning, but midday buyer support has redeveloped across the complex, helping to push feeder cattle trade to triple-digit gains. Although most of the buyer support is focused on short covering following Thursday's market pullback, the underlying support across the complex continues to add increased interest ahead of the afternoon cattle on feed report.
Over the past two months, cattle placement numbers have been the driver behind the prices tumble in feeder cattle and live cattle trade. Although placements will still be a major focus, it appears that most attention will be once again moved back to cattle on feed numbers. Placements are expected to be well under year ago levels due to the strong placement levels seen in October and November.
January feeders are $1.55 higher at $223.25, March feeders are $1.53 higher at $224.9 and April feeders are $1.65 higher at $230.10.
LEAN HOGS:
Lean hog futures are shifting higher Friday morning, although limited trade volume is likely to limit overall trade interest through the rest of the session. Following a firm pullback in prices early in the week, late week short covering and position adjustments are the focus Friday.
Traders are also trying to make any last adjustments to positions in front of both the quarterly hogs and pigs report and the upcoming holiday weekend. Expectations of light hog herd reductions are the majority consensus of the market, although even these inventory and planned pullbacks in numbers are not expected to be viewed overall optimistic as many have hoped overall production would slow faster than what the upcoming report is expected to show.
February futures continue to lead the market higher, with moderate gains seen through the rest of the complex. February lean hogs are $1.15 higher at $71.8, April lean hogs are $0.83 higher at $77.775 and May lean hogs are $0.58 higher at $84.125. Hog Prices are unreported due to confidentiality on the Daily Direct Morning Hog report. Pork Cutouts totaled 213.45 loads with 196.83 loads of pork cuts and 16.62 loads of trim. Pork cutout values are up $0.32 at $80.65.
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