Friday Morning Livestock Market Update - Two-Sided Trading Activity May Unfold

GENERAL COMMENTS:

December cattle go off the board Friday and will see limited price movement. It was the only contract which posted a gain Thursday. Other contracts closed lower but the earlier losses were trimmed as cash cattle began trading higher than last week. Packers paid $172 in the South and $172-$173 live in the North with dressed at $273. These are $1 to $3 higher than last week. This should provide some support as more cash sales should take place in line with these prices. The opposite impact could come from further weakness of boxed beef as choice declined $0.20 with select down $1.08. However, stronger cash should provide support as February will take over as the lead month on Tuesday and is carrying a discount to cash. Weekly export sales will be released Friday morning.

Hog futures closed lower Thursday after a brief period in positive territory. Lower lows again may set a negative tone to the market Friday. Cash was higher on the National Daily Direct Afternoon Hog report with a minimal gain of $0.10. Packers were able to procure hogs without much need to bid aggressively. Cutouts were up slightly, posting a gain of $0.09. Hogs have struggled this week but may find some stability as traders position themselves for the final trading day of the year. Saturday slaughter is estimated at 315,000 head as packers try to make up for the downtime last Monday.

	BULL SIDE		BEAR SIDE
1)	Higher cash should provide some support to futures with February taking over as the lead month on Tuesday.	1)	The continued weakness of boxed beef may be an anchor on the potential for continued higher cash.
2)	Cattle futures seem to be building support as they move in a sideways trading range.	2)	Beef inventory has been increasing seasonally over the past three months with November inventory at the highest level since April.
3)	Hog futures may rebound as traders may cover short positions into the end of the year and the extended weekend.	3)	Hog futures may retest the previous lows based on market movement this week and seemingly the overall slower demand.
4)	Strong weekly export sales of pork would provide what is needed to support the market. The weaker U.S. Dollar could increase international interest.	4)	If weekly export sales are less than last week, the market may remain under pressure into 2024.