General Comments
The livestock contracts have warmed up as Monday continues to trade and heading into the noon hour, the marketplace is trading fully higher. Traders were slow to start the day off but as more time goes on their willingness to invest has grown. It's too early in the week for cash cattle trade to really get underway but feedlots are expected to price cattle higher again this week. March corn is up 1/4 cent per bushel and January soybean meal is up $3.50. The Dow Jones Industrial Average is down 79.76 points and NASDAQ is down 97.21 points.
LIVE CATTLE
Trailing confidently above $114 in the February live cattle contract, Monday's support is helping move the live cattle contracts higher and past nearby resistance levels. December live cattle are up $0.17 at $110.65, February live cattle are up $0.07 at $114.92 and April live cattle are up $0.10 at $118.72. The market's support could be stemming from Monday's stronger boxed beef prices as the higher figures indicate that the market is trying to rally off a low, as well as rallying upon Friday's encouraging Cattle on Feed Report. Even though the market longs for 2021 (as do the rest of us) we have to remember that there are still two weeks before 2021 makes its appearance and the market could fight some holiday pressure in the meantime. Nevertheless, the underlying support that is driving the market is encouraging as producers long for more profitability in 2021.
The cash cattle market is still quiet with bids unheard of and asking prices still undeveloped. Feedlots are expected to price cattle higher again this week. Showlists this week are larger in Texas, Colorado and Nebraska while slightly lighter in Kansas.
Last week's negotiated cash cattle trade totaled 60,552 head. Of that 41,442 head are for delivery in the next two weeks while the remaining 19,110 head are for delivery in the following 15 to 30 days.
Boxed beef prices are higher: choice up $1.66 ($210.29) and select up $2.57 ($196.84) with a movement of 67 loads (42.35 loads of choice, 7.64 loads of select, 9.93 loads of trim and 6.59 loads of ground beef).
FEEDER CATTLE
The feeder cattle contracts were leery to trade higher Monday morning but as the day has developed the contracts have found moderate support and are trading fully higher. January feeders are down $0.02 at $140.42, March feeders are up $0.47 at $142.77 and April feeders are up $0.45 at $144.35. Given that it's a shortened holiday week, traders aren't overly anxious to invest in the contracts seeing that the week is going to be cut short and with fewer market participants, the market can see some irrational swings over the holidays.
LEAN HOGS
The lean hog contracts are doing a fine job of rallying off last week's advancements and continuing the upward momentum despite it being a holiday week. February lean hogs are up $0.37 at $66.17, June lean hogs are up $0.17 at $80.95 and July lean hogs are up $0.17 at $81.57. Midday pork cutout values saw stellar support and if the market can carry some of that into the day's closing cutout values, the market could react positively given that it needs fundamental support to compliment what the futures market has been able to do as of late.
The projected lean hog index for 12/18/2020 is down $1.17 at $62.55 and the actual index for 12/17/2020 is down $0.67 at $63.72. Hog prices are lower on the National Direct Morning Hog Report, down $0.28 with a weighted average of $50.56, ranging from $45.00 to $53.00 on 5,835 head and a five-day rolling average of $52.02. Pork cutouts total 220.84 loads with 205.79 loads of pork cuts and 15.05 loads of trim. Pork cutout values: up $6.51, $77.98.
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