GENERAL COMMENTS:
It was a great day for the lean hog contracts, but a mixed day for the cattle sector. The lean hog contracts took Monday's opportunity and ran with it moving February's contract nearly $2.50 higher. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.77 with a weighted average of $53.44 on 7,860 head. March corn is up 1/2 cent per bushel and January soybean meal is up $0.40. The Dow Jones Industrial Average is down 184.82 points and NASDAQ is up 62.17 points.
LIVE CATTLE:
The live cattle contracts would have liked to close higher, but as the day progressed, the market's support became shaky. December live cattle closed $0.35 higher at $109.10, February live cattle closed $0.15 lower at $113.10 and April live cattle are unchanged at $117.37. Larger showlists this week are expected after last week's light cash cattle run, but that unfortunately adds to the pressure that feedlots already carry. If feedlots can wait until later in the week and resist selling early, there's a chance that the market could see trade steady with last week's business. Packers are going to be hard to negotiate with as they will use weakening boxed beef prices and the upcoming shortened holiday weeks to try to move the market lower. Monday's slaughter is estimated at 120,000 head, 1,000 head more than a week ago and steady with a year ago.
Last week's negotiated cash cattle trade only totaled 57,124 head. Of that, 37,303 head are committed for delivery in the next upcoming two weeks, while the remaining 19,821 head are scheduled for delivery in the following 15 to 30 days.
Boxed beef prices closed lower: choice down $4.19 ($209.69) and select down $3.41 ($192.30) with a movement of 177 loads (127.19 loads of choice, 21.16 loads of select, 15.48 loads of trim and 13.55 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady. Hopefully (fingers crossed) there isn't any trade that develops Tuesday and feedlots can push the market's business into the later part of the week.
FEEDER CATTLE:
As the day grew longer, the support in the feeder cattle market grew mixed, as some contracts were able to close higher while some nearby contracts fought modest resistance. January feeders closed $0.30 higher at $140.02, March feeders closed $0.05 higher at $140.60 and April feeders closed $0.05 lower at $141.85. The feeder cattle complex may have been able to close fully higher if the live cattle market would have been met with ample support and if the corn market would have closed fully lower. At Joplin Regional Stockyards in Carthage, Missouri, compared to a week ago, steers under 600 pounds sold steady to $5.00 higher and steers over 650 pounds sold steady. Heifer calves under 650 pounds sold steady to firm, while heifers over 650 pounds sold completely steady. Following last week's massive movement, it was a bit of a relief for the market to only face a moderate supply Monday morning. The CME feeder cattle index Dec. 11: down $0.09, $136.57.
LEAN HOGS:
While the cattle contracts were unsure of how to trade Monday, the lean hog market wasted no time scaling higher, and closed the day on a positive note. February lean hogs closed $2.45 higher at $65.67, April lean hogs closed $1.32 higher at $68.82 and June lean hogs closed $0.30 higher at $79.20. The market's support stemmed solely from technical influences as both the cutout values and cash hog market closed lower. Pork cutouts totaled 301.54 loads with 265.82 loads of pork cuts and 35.73 loads of trim. Pork cutout values: down $2.68, $77.03. Monday's slaughter is estimated at 497,000 head, 10,000 head more than a week ago and 2,000 head more than a year ago. Saturday's slaughter is estimated at 300,000 head. The CME lean hog index for Dec. 10: down $0.26, $65.35.
TUESDAY'S CASH HOG CALL: Steady. The futures market may try to trade higher again Tuesday, but without strong fundamental signals aligning for the cash market, it will be unlikely that we see the cash market jump significantly higher.
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