GENERAL COMMENTS:
Strong early gains developing in feeder cattle trade during the first half of Monday's trading session has left traders looking for additional direction later in the week. However, nearby feeder cattle futures slipped significantly from daily market highs of nearly $4 per cwt, but the triple-digit gain is still not likely to leave many too fearful.
Live cattle futures once again posted solid gains in all contract months as traders will continue to monitor overall market activity and more importantly trade volume in the days before Christmas.
Mixed trade with very limited long-term direction was seen throughout the lean hog complex as softness in nearby contracts was offset by light to moderate deferred contract support. Hog prices closed higher on the Daily Direct Afternoon hog report, up $0.40 with a weighted average of $48.39 on 4,342 hogs. March corn closed down 6 at $4.77 and January soybean meal closed up $7.20 at $412.8. The Dow Jones Industrial Average is up 0.86 at 37,306.02.
LIVE CATTLE:
Live cattle futures followed the direction of feeder cattle trade higher during morning trade. This allowed most live cattle contracts to hold gains between $1 and $2 per cwt for most of the morning and into midday. In the last hour of trade, buyer support cooled significantly across all cattle markets, as buyer support did not disappear but became much less aggressive at closing bell. The ability for nearby contracts to still steadily move higher and summer contracts posting gains just shy of $1 per cwt continues to focus on renewed underlying support moving into the market, with potential for additional upside movement in the coming days.
Cash cattle activity remains at a standstill with bids and asking prices undeveloped Monday afternoon. It is likely to be midweek or later before active interest is seen in the market.
Showlists remain mixed higher in Nebraska and Colorado, and lower in Texas and Kansas. December live cattle closed $0.60 higher at $168.825, February live cattle closed $0.28 higher at $169.625 and April live cattle closed $0.65 higher at $173.5.
Monday's slaughter is estimated at 125,000 head, 1,000 head less than a week ago and 26,000 head more than a year ago.
Boxed beef prices closed mixed: choice down $2.71 ($288.93) and select up $2.90 ($263.72) with a movement of 126.39 loads (69.98 loads of choice, 23.45 loads of select, 23.94 loads of trim and 9.02 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. Interest Tuesday is likely to remain subdued, although a few early asking prices may start to develop through the last half of the day. The futures support is helping feeders focus on steady to higher prices heading into the Christmas Holiday.
FEEDER CATTLE:
Feeder cattle futures surged higher during morning trade as renewed interest developed following the weekend break. Although the market remained positive through the entire trading session, buyer interest slowed as the day continued, reducing closing prices from daily highs. Nearby contracts still closed with strong triple digit gains as nearby futures held price gains near or over $2 per cwt. The lack of uncertainty of continued volume later in the week and the release of the December cattle on feed report Friday may keep traders jittery through much of the week.
January feeders closed $2.28 higher at $223.175, March feeders closed $1.98 higher at $224.15 and April feeders closed $2.05 higher at $228.625. The CME Feeder Cattle Index for Dec. 14: down $0.92, $218.15.
LEAN HOGS:
Lean hog futures remained mixed in generally lightly traded through the entire Monday session. Nearby February and April contracts closed lower as traders continue to focus on current supply levels and uncertainty that pork demand will significantly change in the first quarter of 2024. However, additional support is starting to redevelop in the last half 2024 contract months with October futures leading the complex higher.
February lean hogs closed $0.33 lower at $71.575, April lean hogs closed $0.05 lower at $78.575 and May lean hogs closed $0.15 higher at $84.85. Monday's hog slaughter is estimated at 489,000 head, 27,000 head more than a week ago and 8,000 head more than a year ago. Pork Cutouts totaled 260.15 loads with 211.06 loads of pork cuts and 49.09 loads of trim. Pork cutout values are down $0.36 at $83.97. The CME Lean Hog Index for Dec. 14: down $0.60, $67.15.
TUESDAY'S HOG CALL: Steady to $1 higher. Early week buying ahead of the holiday weekend and plant shutdowns for the Christmas holiday is expected to help firm price levels early Tuesday morning.
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