Wednesday Morning Livestock Market Update - Strength in Cattle Futures May Temper

GENERAL COMMENTS:

Feeder cattle again were the leaders Tuesday, but live cattle did not lag far behind. There has not been a significant change in boxed beef with prices mixed. Choice gained $1.51 while Select declined $3.54. It has been somewhat surprising that traders were as aggressive as they have been over the past three days. The anticipation of this week is for cash to be no better than steady with the potential for lower cash as the packers have some cattle already purchased ahead. Dressed cattle weights averaged 924.1 pounds last week, down 3.2 pounds from the previous week, but remain at record high levels. Weights are expected to decrease through the winter but still remain large. The Cattle on Feed report estimates are for on-feed Nov. 1 at 99.9%. October placements are estimated at 103.3%. Marketings in October are estimated at 105.1%.

Hog futures closed mixed Tuesday with pressure through the June contract and later contracts posting gains. There was no specific reason for this divergence as the gains and losses were minimal. However, the nearby contracts continued to struggle at the new lows on Tuesday, indicating the recent downtrend remains intact. The National Direct Afternoon Hog report showed further cash weakness with a decline of $0.83. Higher cash had been expected, but not realized. The packers should be more aggressive Wednesday as they increase ownership. Pork cutouts took a hit with values declining by $2.39. This may keep pressure on futures Wednesday as there is concern the strong demand may be tempering.

	BULL SIDE		BEAR SIDE
1)	Live cattle pushed above technical resistance, which may increase the buying interest of traders.	1)	Traders may temper their exuberance in cattle futures as they look ahead to the Cattle on Feed report to be released Friday. The placement number will keep traders cautious as it has been notoriously bearish.
2)	Feeder cattle continued to support the cattle complex as traders turned bullish on cattle supplies. Feedlots are active buyers in the country, finding continued tight supplies.	2)	Feeder cattle have had three strong days with liquidation generally running its course over that time. Futures could drift lower through the end of the week.
3)	Hog futures have corrected their overbought status and may find renewed buying interest if the funds want to defend their long positions.	3)	Hog futures have been in a downtrend and the lack of support from cash or cutouts may keep pressure on the market.
4)	The packers should be more aggressive Wednesday as they still need to purchase hogs to fulfill their slaughter needs.	4)	Fund traders hold record-long futures positions and further weakness could trigger increased liquidation.

Tuesday Closing Livestock Market Update - Traders Continue to Dive Into Cattle Contracts

GENERAL COMMENTS:

It was another rip-roaring rallying day for the cattle complex as traders continue to dive into both the live cattle and feeder cattle markets which is helping propel the contracts higher despite the market's fundamentals being somewhat exhausted. Meanwhile, the lean hog complex closed lower yet again as traders hope to see better market fundamentals. December corn is down 2 cents per bushel and December soybean meal is down $1.70. The Dow Jones Industrial Average is down 146.03 points.

LIVE CATTLE:

It was another powerful day for the live cattle contracts as the continued support of traders allowed the market to close anywhere from $1.00 to $2.00 higher. It was especially exciting to see the spot February contract close above the market's 40-day moving average, as that hasn't happened since the commodity market meltdown in early August. December live cattle closed $2.47 higher at $186.57, February live cattle closed $2.02 higher at $188.00, and April live cattle closed $1.50 higher at $290 dressed sales happened in Eastern Nebraska at $290, but the real kicker of those sales was that they're committed for the week of December 9. It's obvious that packers want to continue to hold the cash market from gaining momentum and trading higher, which they're trying to manage by purchasing cattle with time and keeping enough supply around them. Asking prices are noted in the South at $187 to $188 but are still not established for the North. 

Tuesday's slaughter is estimated at 126,000 head -- 5,000 head more than a week ago and 1,000 head more than a year ago.

Boxed beef prices closed mixed: choice up $1.51 ($308.79) and select down $3.54 ($271.91) with a movement of 135 loads (67.50 loads of choice, 44.53 loads of select, 4.15 loads of trim and 18.39 loads of ground beef).

WEDNESDAY'S CATTLE CALL: Steady to somewhat lower. With next week being a holiday-shortened schedule, it's unlikely that packers will buy aggressively this week as throughput will be lighter next week.

FEEDER CATTLE:

As time passed the support of traders only grew sweeter and sweeter and by the day's close, the complex successfully ended the day at levels not last seen since before the commodity market meltdown in early August. January feeders closed $2.50 higher at $252.00, March feeders closed $2.62 higher at $251.25 and April feeders closed $2.60 higher at $252.15. As traders continue to flock into the feeder cattle market, its upward potential seems somewhat unbridled at this point as traders have boldly dived into the complex despite the market's fundamentals (besides feeder cattle demand, hence the CME feeder cattle index closing above $253) not being of much help. At Oklahoma National Stockyards in Oklahoma City, Oklahoma compared to last week, feeder steers and heifers traded mostly steady. Steer and heifer calves over 450 pounds sold steady, those under 450 pounds traded $10.00 higher. Feeder cattle supply over 600 pounds was 39%. The CME feeder cattle index 11/18/2024: up $1.06, $253.68.

LEAN HOGS:

With fundamental support being hard to come by in the lean hog market right now, it again comes as no surprise that the complex rounded out the day mostly lower. The market's nearby contracts closed lower but some of the furthest deferred months were able to close mildly higher. December lean hogs closed $0.47 lower at $79.55, February lean hogs closed $0.40 lower at $82.87 and April lean hogs closed $0.32 lower at $87.10. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.83 with a weighted average price of $82.49 on 5,365 head. Pork cutouts totaled 393.37 loads with 330.97 loads of pork cuts and 62.40 loads of pork cuts. Pork cutout values: down $2.39, $94.68. Tuesday's slaughter is estimated at 489,000 head -- steady with a week ago and 1,000 head more than a year ago. The CME lean hog index 11/15/2024: down $0.78, $88.49.

WEDNESDAY'S HOG CALL: Steady. Packers were slightly more aggressive in today's cash market, but it's likely that they still need more hogs.

Friday Closing Livestock Market Update - Extra Trader Interest Helps Drive Cattle Higher Ahead of the Weekend

GENERAL COMMENTS:

The livestock complex rounded out the week mixed as the cattle contracts saw extra trader interest flow into their markets, but the lean hog complex wasn't as fortunate. The cash cattle market didn't see much interest, as packers did most of their buying earlier in the week. December corn is up 5 cents per bushel, and December soybean meal is up $2.60. The Dow Jones Industrial Average is down 305.87 points.

From Friday to Friday, livestock contracts scored the following changes: December live cattle down $0.75, February live cattle down $0.05; November feeder cattle up $5.67, January feeder cattle up $5.80; December lean hogs down $0.92, February lean hogs down $1.93; December corn down $0.07, March corn down $0.09.

Friday's export report revealed that beef net sales of 14,200 metric tons (mt) for 2024 were up 78% from the previous week and 8% from the prior four-week average. The three primary buyers were Japan (4,300 mt), South Korea (2,500 mt) and Mexico (2,200 mt). Pork net sales of 19,800 mt for 2024 were down noticeably from the previous week and down 12% from the prior four-week average. The three primary buyers were Mexico (9,600 mt), Japan (3,900 mt) and Colombia (2,100 mt).

LIVE CATTLE:

The live cattle market was able to close higher on Friday afternoon solely because of the added interest of traders as they flocked to the ag commodity markets to hopefully hedge against some of the inflation that could remain in the marketplace heading into 2025. December live cattle closed steady at $182.95, February live cattle closed $0.15 higher at $185.25, and April live cattle closed $0.47 higher at $187.40. The spot February contract was able to maintain its position above the market's 100-day moving average, which continues to be a support plane the market is dancing around. Bids of $185 were offered throughout the day in Nebraska and Kansas, but feedlot managers didn't seem interested in trading any more cattle at weaker prices. Throughout the week, Southern live cattle traded at mostly $185, which is $2 lower than last week's weighted average, and Northern dressed cattle traded at mostly $290, which is $3 lower than last week's weighted average.

Friday's slaughter is estimated at 120,000 head -- 4,000 head more than a week ago and steady with a year ago. Saturday's slaughter is projected to be around 3,000 head. The week's total slaughter is estimated to be 606,000 head -- 13,000 head less than a week ago and 33,000 head less than a year ago.

Boxed beef prices closed lower: choice down $0.46 ($303.34) and select down $0.52 ($276.14) with a movement of 115 loads (65.67 loads of choice, 25.50 loads of select, 12.28 loads of trim and 11.18 loads of ground beef).

MONDAY'S CATTLE CALL: Steady to somewhat lower. Given that the market is nearing a holiday week, it's likely that packers won't be overly aggressive in the cash cattle market.

FEEDER CATTLE:

The feeder cattle complex was treated well Friday by traders, as many of them took it upon themselves to jump into the ag commodity sector to hedge against any inflation that is to come. November feeders closed $3.47 higher at $251.10, January feeders closed $4.02 higher at $247.22 and March feeders closed $3.92 higher at $245.65. I would also be remiss not mention just how strong buyer demand has been in the market as of late, which is clearly indicated through the CME's feeder cattle index, which closed Friday afternoon at $252.31. The Oklahoma Weekly Cattle Auction Summary revealed that compared to last week and throughout the entire state, feeder steers and heifers over 700 pounds sold steady to $3 higher, but steers and heifers under 700 pounds traded up to $10 higher. Steer and heifer calves sold up to $20 stronger. Slaughter cows sold steady to $2 higher, lean cows sold $4 lower and slaughter bulls traded $2 higher. Feeder cattle supply over 600 pounds was 46%. The CME feeder cattle index 11/14/2024: up $1.27, $252.31.

LEAN HOGS:

The lean hog complex started the day out on a lousy note with the morning's disappointing export sales report, and the market continued to trade lower from that point on. December lean hogs closed $0.60 lower at $79.50, February lean hogs closed $0.87 lower at $82.90 and April lean hogs closed $1.22 lower at $86.90. Yes, pork cutout values were up again Friday afternoon, but after the topsy-turvy week the pork cutout sector had, one day of higher prices isn't enough security to give traders much confidence. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.47 with a weighted average price of $84.67 on 2,422 head. Pork cutouts totaled 312.62 loads with 288.27 loads of pork cuts and 24.35 loads of trim. Pork cutout value: up $3.04, $97.11. Friday's slaughter is estimated at 484,000 head -- 1,000 head less than a week ago and 4,000 head more than a year ago. Saturday's slaughter is projected to be 225,000 head. The CME lean hog index 11/13/2024: down $0.16, $89.78.

MONDAY'S HOG CALL: Lower. Packers rarely support the cash market aggressively on Mondays, and it's unlikely that they'll need to next week.

Friday Midday Livestock Market Update - Cattle Experience Late-Week Jump

GENERAL COMMENTS:

Thus far it's been a mixed morning for the livestock complex as the cattle contracts are seeing better trader interest, but the lean hog complex is continuing to fall lower. No new cash cattle trade has developed, but a bid is currently offered in Nebraska at $185 live. December corn is up 3 1/2 cents per bushel and December soybean meal is up $1.40. The Dow Jones Industrial Average is down 329.86 points.

Thursday's export report shared that beef net sales of 14,200 metric tons (mt) for 2024 were up 78% from the previous week and 8% from the prior 4-week average. The three primary buyers were Japan (4,300 mt), South Korea (2,500 mt) and Mexico (2,200 mt). Pork net sales of 19,800 mt for 2024 were down noticeably from the previous week and down 12% from the prior 4-week average. The three primary buyers were Mexico (9,600 mt), Japan (3,900 mt) and Colombia (2,100 mt).

LIVE CATTLE:

The live cattle complex has received mixed messages this week from traders, but Friday's interest has been exceptional as traders are eagerly jumping into the live cattle market and helping to push the contracts higher. December live cattle are up $0.95 at $183.90, February live cattle are up $1.22 at $186.32, and April live cattle are up $1.65 at $188.57. No more cash cattle trade has developed, but a bid of $185 has been offered in Nebraska. It's likely some clean-up trade could develop ahead of the day's end, but by and large it looksing like the bulk of this week's trade is done. So far this week, Southern live cattle have traded at mostly $185, which is $2.00 lower than last week's weighted average, and Northern dressed cattle have traded at mostly $290, which is $3.00 lower than last week's weighted average.

Boxed beef prices are mixed: choice down $0.39 ($303.41) and select up $0.13 ($276.79) with a movement of 66 loads (34.98 loads of choice, 13.47 loads of select, 10.29 loads of trim and 6.87 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex is soaring higher into Friday's noon hour as the market experiences a late week rally with most nearby contracts trading $3.00 higher. November feeders are up $3.10 at $250.72, January feeders are up $3.40 at $246.62, and March feeders are up $3.20 at $244.92. Yes, the live cattle complex is trading slightly higher as well, but the feeder cattle market is the leader Friday as it charges sharply higher. It's to pinpoint what exactly is driving the market higher as this week boxed beef prices have been lower, the fed cash cattle market has traded $1.00 to $3.00 lower and this morning corn prices are slightly higher. So upon evaluating the market's various factors, it would appear the tremendous demand in the countryside, which has pushed the CME Feeder Cattle Index to $251.04 (Thursday's close) seems to be the driving force behind Friday's energetic trade.

LEAN HOGS:

The lean hog complex is again trailing lower into the day's noon hour as traders weren't overly impressed with the week's export sales report. December lean hogs are down $0.15 at $79.95, February lean hogs are down $0.32 at $83.45, and April lean hogs are down $0.55 at $87.57. Yes, pork cutout values are up $4.45, but with the wild price swings seen earlier this week, traders are fearful of continued whiplash in the pork sector as the belly price doesn't seem to be stabilizing.

The projected CME Lean Hog Index for 11/14/2024 is down $0.51 at $89.27, and the actual index for 11/13/2024 is down $0.16 at $89.78. Hog prices are lower on the Daily Direct Morning Hog Report, down $4.31 with a weighted average price of $82.87, ranging from $82.00 to $85.00 on 782 head and a five-day rolling average of $87.14. Pork cutouts total 205.43 loads with 187.11 loads of pork cuts and 18.32 loads of trim. Pork cutout values: up $4.45, $98.52.