GENERAL COMMENTS:
Holidays wreak havoc on the futures market. As
traders step out of the market to take a holiday vacation with their
families, sale barns close until after the New Year and cash buyers
simply want to buy their last pen and head home -- it's not surprising
that the week closes lower, as Friday was largely uneventful. Hog prices
are higher on the National Direct Afternoon Hog Report up $0.03 with a
weighted average of $47.81. February live cattle are up $0.18 at $125.8,
January feeder cattle are down $0.45 at $144.275, February lean hogs
are down $0.30 at $70.675, March corn is up 1 1/4 cents per bushel and
January soybean meal is down $0.50. The Dow Jones Industrial Average is
up 78.13 points and NASDAQ is up 37.74 points.
From Friday to Friday livestock futures scored
the following changes: December live cattle down $0.15, February live
cattle down $1.75; January feeder cattle down $1.40, March feeder cattle
down $1.88; February lean hogs up $1.18, April lean hogs up $1.28.
LIVE CATTLE:
Quick to shoot to steady prices at the bell's
closing whistle, the spot December contract was able to close mildly
higher, but most of the complex closed slightly lower. December live
cattle closed $0.10 higher at $122.22, February live cattle closed $0.17
higher at $125.80 and April live cattle sold $0.02 lower at $126.72.
Cash cattle trade really did most of their business Thursday, with only a
handful of pens selling Friday in the North for fully steady prices
with Thursday's trade.
Friday's Cattle on Feed report came with no
major surprises: Cattle/calves on feed was up 2%, Placements were up 5%
and Marketings were down 3%. The biggest outlier again was the placement
projection, which didn't come as a major surprise because cattlemen
have been attune to the market. Many knew that a lot of feeders were
placed in feedlots early this year due to producers being tired of the
market's turmoil. There's anticipation of a cold, long and wet winter
and cattlemen don't want to have to carry them through. And then there's
the simple fact that wheat pastures didn't come on like many had hoped.
That all equates to the fact that feeders needed to go somewhere, and
as more data is presented, there's no denying that those feeders have
gone to the feedlots. Closing boxed beef prices are higher: choice up
$0.71 ($209.70) and select up $0.04 ($201.03) with a movement of 117
loads (72.25 loads of choice, 12.38 loads of select, 8.84 loads of trim
and 23.37 loads of ground beef).
Friday's slaughter is estimated at 116,000 head,
6,000 head less than a week and year ago. Saturday's slaughter is
projected to be at 66,000 head, 12,000 head more than a week ago and
10,000 head less than a year ago.
MONDAY'S CASH CATTLE CALL: Steady. Knowing that
next week will be light on cattle trade with packers having cattle
committed for delivery next week, and due to the Christmas holiday, cash
cattle trade will be tough next week. Tough in the essence that with
Christmas falling on a Wednesday, business is going to have to be swift
either early in the week or wait until the later half and there will be
few participating in the market overall.
FEEDER CATTLE:
Feeder cattle contracts dip lower and look for
support to build after the first of the year. January feeder cattle
closed $0.45 lower at $144.27, March feeders closed $0.45 lower at
$144.37 and April feeders closed $0.50 lower at $146.50. All in all this
week wasn't overly kind to the feeder cattle market -- sale barns were
able to sell calves for respectful prices, but with the board needing
more cumulative volume, it makes it hard for any progress to be made.
On an estimated run of 2,291 head at Farmers and
Ranchers Livestock Commission in Salina, Kansas, compared to the
previous week, steers weighing 850 to 1,050 pounds sold steady to $1.00
higher, steers weighing 600 to 850 pounds sold $3.00 to $5.00 higher and
steers weighing less than 600 pounds sold with a lower undertone.
Heifers weighing 750 to 1,100 pounds sold steady to $2.00 lower,
750-pound heifers and lighter higher sold with a stronger undertone.
Most sale barns closed their doors Friday and put up the sign out front
that business will resume after the first of the year. The CME feeder
cattle index 12/19/19: $146.26, up $0.51.
LEAN HOGS:
Lean hog contracts were the only sector able to
close somewhat higher. February lean hogs closed $0.30 lower at $70.67,
April lean hogs closed steady at $77.50 and May lean hog contracts
closed $0.30 lower at $83.70. For the most part nearby contracts closed
steady to somewhat lower while deferred contracts closed mildly higher.
Pork cutouts totaled 324.37 loads with 285.36 loads of pork cuts and 39
loads of trim. Pork cutout values: down $0.17 at $76.54. The CME lean
hog index 12/18/19: $60.23, down $0.42.
MONDAY'S CASH HOG CALL: Slightly softer market.
As we look to next week knowing that everything is going to be slower
and lethargic in nature with the holiday, it wouldn't be out of the
ordinary to see hogs trade for less money.
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