General Comments
As Thursday rolls into the afternoon, more support continues to build in the livestock contracts. The lean hog and live cattle contracts have danced gingerly in their nearby contracts as support wasn't trading robustly early Thursday morning but with a strong export report for the hog market, and higher midday boxed beef prices for the beef sector, both markets have come around to trading mostly higher. March corn is up 2 1/2 cents per bushel and January soybean meal is up $2.70. The Dow Jones Industrial Average is up 90.02 points and NASDAQ is up 56.84 points.
LIVE CATTLE
Boxed beef prices have taken a royal beating over the last month but seeing Thursday's midday prices cautiously higher along with robust support on the futures market is making for a dynamic market heading into the afternoon. December live cattle are up $0.07 at $108.85, February live cattle are up $0.35 at $114.12 and April live cattle are up $0.40 at $118.22. The cash cattle market is shaping up to be an utter standstill in the South this week. Southern feedlots are serious about their asking prices and aren't willing to budge without getting at least $108. Meanwhile the trade in the North this week was disappointing as prices fell $3.00 to $5.00 softer than a week ago but a lot of those cattle were extremely heavy and feedlots didn't want to run the risk of carrying those cattle over the next two holiday-shortened weeks. Thursday's cash cattle market is still quiet with packers not wanting to up their Southern bids.
Boxed beef prices are higher: choice up $1.23 ($208.45) and select up $1.67 ($193.76) with a movement of 48 loads (29.59 loads of choice, 7.51 loads of select, 4.81 loads of trim and 6.29 loads of ground beef).
Beef net sales of 10,100 mt reported for 2020 were up noticeably from the previous week, but down 15% from the prior four-week average. Increases primarily for Japan (3,800 mt, including decreases of 800 mt), South Korea (2,200 mt, including decreases of 1,300 mt) and Canada (1,700 mt, including decreases of 100 mt).
FEEDER CATTLE
The feeder cattle contracts are bound and determined to keep with their upward momentum and thus far through Thursday's trade the market's been able to scale fully higher. January feeders are up $0.62 at $141.47, March feeders are up $0.72 at $142.70 and April feeders are up $0.75 at $144.00. As the spot January feeder cattle contract moves closed and closer to $142, the market will begin to feel some pressure but given the phenomenal support seen over the last week and an anticipated bullish Cattle on Feed Report, the market may be able to keep with its upward progression heading into 2021.
LEAN HOGS
The lean hog complex is trading mostly higher except for the spot February contract which is just faced with minor resistance. February lean hogs are down $0.30 at $65.67, June lean hogs are up $0.15 at $74.15 and July lean hogs are up $0.25 at $81.02. As the market is being fully supported Thursday morning from interested traders, the market is hoping to keep these levels through closing. If cutout values continue to trade higher and if the cash market could trade somewhat steady the market has a fair chance at closing stronger.
The projected lean hog index for 12/16/2020 is down $0.66 at $64.39, and the actual index for 12/15/2020 is down $0.01 at $65.05. Hog prices are lower on the National Direct Morning Hog Report, down $1.00 with a weighted average of $52.01, ranging from $46.00 to $53.00 on 5,723 head and a five-day rolling average of $52.78. Pork cutouts total 159.21 loads with 143.51 loads of pork cuts and 15.70 loads of trim. Pork cutout values: up $1.21, $76.07.
Pork net sales of 39,900 mt reported for 2020 were up 51% from the previous week and from the prior four-week average. Increases primarily for Mexico (22,400 mt, including decreases of 900 mt), China (11,600 mt, including decreases of 1,500 mt), Canada (1,900 mt, including decreases of 400 mt).
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