Friday Closing Livestock Market Summary - Livestock Markets Closed Higher Than Anticipated

GENERAL COMMENTS:

Livestock markets were able to close the week a tick higher than expected. Around the noon hour Friday things weren't looking too positive for the lean hog market or feeder cattle market, but despite criticism both markets closed mixed and the live cattle market closed modestly higher. Hog prices are down on the National Direct Afternoon Hog Report, down $0.39 with a weighted average of $44.85. December corn is up 2 cents per bushel and December soybean meal is down $0.70. The Dow Jones Industrial Average is up 6.44 points and NASDAQ is up 40.79 points.

From Friday to Friday, livestock futures scored the following changes:

December live cattle down $0.28, February live cattle up $0.80; November feeder cattle down $2.13, January Feeder cattle down $0.13; December lean hogs down $0.33, February lean hogs up $1.33.

LIVE CATTLE:

A tick higher on Friday to ensure a positive close makes cattlemen dread Monday a little less. Hanging closely around steady to $0.32 higher, live cattle contracts closed mostly higher for the day. December live cattle closed $0.25 higher at $119.25, February live cattle closed $0.17 higher at $125.02 and the April board closed $0.25 higher at $126.10.

It looks as though most of the cash cattle trade has set its tone for the week. Some wondered if cash cattle prices would be able to break over the currently typical $2.00 gain and grasp onto $3.00 to $4.00 gains. A light to moderate trade developed in the South at $114 to $115, $2.00 to $3.00 higher than last week's weighted averages. Northern live cattle were bought at $114 to mostly $116, steady to $2 higher than last week's weighted average basis in Nebraska. Dressed trade was reported in parts of the North Thursday at mostly $181 to $182, generally $1 to $2 higher than last week's weighted average basis Nebraska. There is still the potential for more pens to sell, though most of the action is probably wrapped up for the week.

Closing boxed beef prices are higher: choice up $0.83 ($239.12) and select up $0.24 ($213.26) with a total movement of 121 loads (72.44 loads of choice, 25.95 loads of select, 3.62 loads of trim and 18.83 loads of ground beef). Friday's slaughter is estimated at 117,000 head - down 1,000 head from a week ago and up 2,000 head from a year ago. The CME feeder cattle index for 11/7/19: down $0.24 at $145.85.

MONDAY'S CASH CATTLE CALL: Steady to $1.00. Regardless of when the market's correction takes place -- whether next week or the first week of December -- live cattle prices may not be affected. Given that fat cattle supplies are current and there's plenty of retail money to be made, there isn't a wall of readily available fat cattle that cattlemen need to be worried about right now. The cash cattle market should be able to hold its own fairly easily.

FEEDER CATTLE:

On an estimated run of 5,240 head (up 345 head from the previous week) Ogallala Livestock Auction in Ogallala, Nebraska, sold steers $3.00 to $20.00 higher and heifers were steady to $14.00 higher compared to last week. Demand was good on lighter calves under 500 pounds, and there was a good selection of calves that had pre-conditioned shots. There were quite a few pens that were noted as high quality calves.

Friday closed better for the feeder cattle market than expected. Nearby contracts closed higher and deferred contracts closed slightly lower -- neither one of the groups wanted to move too far away from steady. November feeder cattle are up $0.22 at $147.00, January feeder cattle are up $0.10 at $145.87 and March feeders are steady at $145.50.

LEAN HOGS:

Conversation cleared up the Thursday's headlines about both the U.S. and China lifting tariffs if the phase one trade agreement can be agreed upon. Trade officials noted that tariffs are the main leverage that the U.S. has and President Trump wouldn't want to commit to lifting tariffs until the Chinese had agreed upon the other terms, such as purchasing more agricultural products and abiding to new laws to prevent currency manipulation. Nevertheless, its obvious that the President has high expectations for the agriculture products he hopes that China will purchase and wants to make sure those purchases are prioritized before any tariffs are lifted. The phase one trade agreement may not be coming at the pace many hog producers want, but when it comes hopefully it will be fruitful to the industry.

Lean hog contracts wrapped up the week mostly mixed with nearby contracts higher and deferred contracts lower. December lean hogs closed down $0.17 at $64.12, February lean hogs closed up $0.12 at $73.90 and April lean hogs closed up $0.17 at $80.32. Pork cutouts totaled 262.87 loads with 223.63 loads of pork cuts and 39.24 loads of trim. Pork cutouts values: up $2.03 at $82.67. The CME lean hog index 11/6/19: up $0.03 at $60.19.

MONDAY'S CASH HOG CALL: Steady. Opening the week steady to slightly lower would be the best guess for Monday's cash hog call. 

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