GENERAL COMMENTS:
It was a good start to a new week for the cattle contracts, but the lean hog market traded lower throughout the day, not able to find the same support that's surfaced in the cattle market. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.39 with a weighted average of $50.04 on 10,857 head. March corn is up 5 1/2 cents per bushel and March soybean meal is down $1.40. The Dow Jones Industrial Average is up 204.10 points and NASDAQ is up 94.69 points.
LIVE CATTLE:
The live cattle contracts took ahold of Monday's support and ran while traders were willing. February live cattle closed $0.80 higher at $115.77, April live cattle closed $0.55 higher at $119.52 and June live cattle closed $0.32 higher at $114.80. It's exciting to see the April contract etch closer to $120.00, and for the marketplace to see ample support both technically and fundamentally. Last week's stronger cash cattle trade did the countryside not only a favor from a market perspective, as cash prices were anywhere from $2.00 to $5.00 higher, but also psychologically as feedlots are gunning for higher prices again this week. There's yet to be any action develop throughout the countryside, but some feedlots in Eastern Nebraska have priced their cattle upwards of $180 but asking prices in the Southern Plains are still unknown. Monday's slaughter is estimated at 119,000 head, steady with a week and year ago. Trade is not expected to develop until maybe late Tuesday or Wednesday.
Boxed beef prices closed mixed: choice up $0.28 ($207.82) and select down $1.28 ($196.65) with a movement of 160 loads (85.68 loads of choice, 35.93 loads of select, 23.03 loads of trim and 15.80 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: $2.00 to $4.00 higher. Feedlots are tired of selling cattle for cheap, and are ready for 2021 and greater profitability. A strong mindset and eagerness to capture more of this week's market will likely help feedlots get their asking prices and more the market higher once again.
FEEDER CATTLE:
The resiliency in the feeder cattle market carried through the day's close, allowing nearby contracts to close higher despite elevated corn prices, but, unfortunately, the deferred contracts did scale slightly lower before closing. January feeders closed $0.07 higher at $141.00, March feeders closed $0.27 higher at $142.60 and April feeders closed $0.20 higher at $144.12. The feeder cattle market would like to rally boldly alongside the live cattle contracts, but these strong corn prices are making feedlots recheck their breakevens. At Sioux Falls Regional Cattle Auction in Worthing, South Dakota, compared to two weeks ago, the market was too lightly tested to make an accurate comparison on steers, but heifer calves traded mostly steady. This week's offering was different that the sale two weeks ago, which made it hard to compare the cattle that sold. Nonetheless, yearling heifers were $3.00 higher, except those weighing 800 to 850 pounds, which were $5.00 to $10.00 higher. Only a few steer and heifer calves traded as most producers are waiting until after the first of the New Year to start marketing those calves when demand hopefully resurfaces. Slaughter cows were $3.00 to $6.00 higher with instances of even $8.00 higher, slaughter bulls were not well tested. The CME feeder cattle index for Dec. 25: down $0.17, $138.29.
LEAN HOGS:
The hog market wasn't as prosperous as the cattle contracts were through Monday's trade and ultimately the market closed lower. February lean hogs closed $0.45 lower at $66.50, April lean hogs closed $0.35 lower at $70.75 and June lean hogs closed $0.45 lower at $81.87. It would appear that Monday's pork cutouts were considerably larger, as pork cutouts totaled 582.52 loads, but that's taking into account everything from Dec. 24-25, and everything up until 2:00 p.m. (CST) Monday afternoon. Given that the USDA wasn't open for those two days, they simply compiled those extra figures into Monday's report. Pork cutouts total 582.52 loads with 539.67 loads of pork cuts and 42.86 loads of trim. Pork cutout values: up $2.51, $71.85. Monday's slaughter is estimated at 490,000 head, 3,000 head more than a week ago and 5,000 head more than a year ago. The CME lean hog index for Dec. 24: not available at this time.
TUESDAY'S CASH HOG CALL: Lower. With there being plenty of market-ready hogs lining the countryside, packers aren't going to be wildly aggressive in this week's cash market as it's once again a shortened holiday week.
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