GENERAL COMMENTS:
Strong late-day support developed through all cattle futures Wednesday afternoon. The sluggish market shifts seen early in the session in both live cattle and feeder cattle trade created limited market support and mixed price moves at midday. However, unlike the previous trading days where prices quickly eroded in the last hour of trade, Wednesday's market shifts helped to bring some additional momentum to the complex.
Hog futures remained under light to moderate pressure with traders still concerned that current production trends may not be quickly changing and could further oversupply demand through early 2024. Hog prices closed higher on the Daily Direct Afternoon hog report, up $0.85 with a weighted average of $47.82 on 3,279 hogs.
March corn closed down 3 at $4.698 and January soybean meal closed down $3.30 at $399.9. The Dow Jones Industrial Average is down 475.92 at 37,082.00.
LIVE CATTLE:
Live cattle futures moved above the $170 per cwt level for the first time in December as active buyer interest moved back into the complex during the last hour of trade. Although volume remains sluggish heading into the Christmas holiday week, the focus on increased underlying support in feeder cattle markets became the main driver once again for the renewed late day price surge. Deferred contracts closed higher but lacked the aggressive market support seen in nearby contracts.
Traders will remain cautiously optimistic heading into the last half of the week and the holiday weekend.
Cash cattle markets remain untraded for the most part, although bids are starting to become much more evident Wednesday afternoon. Live bids in the South are seen at $170 per cwt, with live bids in the North hovering around $168 to $170 per cwt. Dressed bids in the North are holding at $270 per cwt. Asking prices have started to now develop at $173 to $175 live. December live cattle closed $1.58 higher at $170.025, February live cattle closed $1.53 higher at $170.3 and April live cattle closed $1.15 higher at $173.825.
Wednesday's slaughter is estimated at 123,000 head, 4,000 head less than a week ago and 1,000 head less than a year ago.
Boxed beef prices closed mixed: choice up $0.30 ($289.13) and select down $1.56 ($261.6) with a movement of 123.67 loads (75.84 loads of choice, 19.91 loads of select, 5.50 loads of trim and 22.42 loads of ground beef).
THURSDAY'S CATTLE CALL: Steady. Increased bids and asking prices are starting to be seen Wednesday afternoon, although there remains a wide gap between feeders and packers at this point.
FEEDER CATTLE:
Feeder cattle futures rallied higher late Wednesday with all contracts posting gains over $2 per cwt. The softness over the last couple of days focusing on uncertainty in overall feeder cattle supplies seemed to lose its momentum in late day trade with active buyer support sweeping through the complex. The market remains generally oversold, but the combination of light volume through the end of the year and positioning in front of the cattle on feed report is helping to draw increased support to the entire market complex.
January feeders closed $2.15 higher at $224.05, March feeders closed $2.55 higher at $225.75 and April feeders closed $2.65 higher at $230.525. The CME Feeder Cattle Index for Dec. 18: up $0.40, $220.31.
LEAN HOGS:
Lean hog futures ended the session with another round of market losses as buyers are hard to find through the week, allowing prices to back away from last week's gains. The concern that pork production may remain strong through the first half of 2024 has continued to keep buyers at bay.
Continued softness in cash hog values and pork prices has also limited any sense of market support in nearby and deferred contract months. Traders are looking for some additional direction from the upcoming hogs and pigs report Friday, but generally this report shows limited market direction given the scope of the report and typical narrow production adjustments that are reported in these reports.
February lean hogs closed $0.33 lower at $70.225, April lean hogs closed $0.68 lower at $76.925 and May lean hogs closed $0.63 lower at $83.725. Wednesday's hog slaughter is estimated at 490,000 head, 1,000 head more than a week ago and 0 head less than a year ago. Pork Cutouts totaled 285.32 loads with 256.63 loads of pork cuts and 28.69 loads of trim. Pork cutout values are down $1.70 at $81.36. The CME Lean Hog Index for Dec. 18: down $0.22, $66.37.
THURSDAY'S HOG CALL: Steady. Limited support in futures trade this week and softness in pork values is likely to limit the ability for active cash market support through the end of the week, especially heading into a long holiday weekend.
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