Thursday, December 10, 2020

Thursday Closing Livestock Market Update - Cattle Contracts Keep Support

GENERAL COMMENTS:

Thursday treated the cattle contracts well, while the lean hog market closed modestly lower. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.84 with a weighted average of $54.24 on 6,074 head. March corn is down 2 1/2 cents per bushel and January soybean meal is down $1.90. The Dow Jones Industrial Average is down 69.55 points and NASDAQ is up 66.86 points.

LIVE CATTLE:

The live cattle complex was able to rally and close higher as traders stepped into the marketplace and support solidified. December live cattle closed $0.55 higher at $107.92, February live cattle closed $0.87 higher at $111.85 and April live cattle closed $0.92 stronger at $115.97. The cash cattle market was quiet again through Thursday's trade with just a few trades transpiring in the North for steady to $1.00 lower with the week's business but $4.00 to $5.00 lower than last week's sales. More trade is expected to develop come Friday, otherwise the week's trade will be relatively small. Thursday's slaughter is estimated at 120,000 head, steady with a week ago and 2,000 head less than a year ago.

Once again, the beef sector can have a sigh of relief after seeing Thursday's actual slaughter data. For the week ending Nov. 28, steers averaged 921 pounds (down 2 pounds from a week ago) and heifers were up 3 pounds at 850 pounds. Nevertheless, it comes as a huge relief to have two weeks in a row that steers carcass weights were lower following the recording breaking levels carcass weights set earlier this fall.

Beef net sales of 3,000 mt reported for 2020 were down 78% from the previous week and 80% from the prior four-week average. Increases were primarily for Japan (3,300 mt, including decreases of 400 mt), Mexico (1,700 mt, including decreases of 100 mt) and Canada (1,300 mt).

Boxed beef prices closed lower: choice down $3.67 ($214.59) and select down $3.18 ($198.47) with a movement of 185 loads (98.01 loads of choice, 26.65 loads of select, 27.14 loads of trim and 33.38 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady. Seeing that there's been trade already in both the North and the South, Friday's business will mostly likely be steady with the week's trade.

FEEDER CATTLE:

With the help of willing traders, the feeder cattle contracts closed fully higher Thursday afternoon. January feeders closed $0.57 higher at $137.60, March feeders closed $0.45 higher at $139.25 and April feeders closed $0.30 stronger at $140.72. The market's strong movement in the futures market trickled into auction sales throughout the countryside and helped give the sale barns a shot at some stronger prices on certain weight groups. At Winter Livestock in Pratt, Kansas, compared to a week ago, feeder steers weighing 450 to 800 pounds sold $4.00 to $10.00 higher and feeder steers weighing 800 to 1,000 pounds sold $2.00 to $5.00 lower. Feeder heifers weighing 500 to 850 pounds sold steady and heifers weighing 850 to 900 pounds sold $4.00 lower. Demand was stout throughout the sale, but the board's support did help raise the market's morale and help prices along their way. The CME feeder cattle index for Dec. 9: down $0.09, $137.11.

LEAN HOGS:

Unfortunately, the lean hog contracts didn't find the same support throughout Thursday's trade like the cattle contracts did. December lean hogs closed $0.32 lower at $64.80, February lean hogs closed $1.17 lower at $65.10 and April lean hogs closed $0.67 lower at $69.07. Cutout values were able to sneak a higher close in before the day concluded, but it wasn't enough to really make the market feel like there's substantial consumer interest. Pork cutouts total 271.25 loads with 233.88 loads of pork cuts and 37.36 loads of trim. Pork cutout values: up $0.63, $78.23. Thursday's slaughter is estimated at 493,000 head, 1,000 head more than a week ago and 5,000 head less than a year ago. The CME lean hog index for Dec. 8: up $0.06, $65.66.

Actual slaughter data shared good news for hog carcass weights. For the week ending Nov. 28, live weights averaged 293 pounds (down 2 pounds from a week ago) and dressed weights were unchanged at 219 pounds.

Pork net sales of 26,500 mt reported for 2020 were down 15% from the previous week and 13% from the prior four-week average. Increases primarily for Mexico (10,400 mt, including decreases of 900 mt), China (6,300 mt, including decreases of 1,900 mt) and Japan (5,500 mt, including decreases of 200 mt)

FRIDAY'S CASH HOG CALL: Steady. Without there being strong fundamental or technical factors aligning, the market will most likely just trade in a steady manner to round out the week.




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