GENERAL COMMENTS:
What a week it was for the livestock sector. The cash cattle market managed to push prices to $130. The feeder cattle contracts rallied on the corn market's weakness and on seeing the strength in live cattle. And the lean hog market saw some holiday buying, which fluctuated pork cutout values. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.08 with a weighted average of $59.90 on 8,368 head. December corn is down 6 1/4 cents per bushel, and December soybean meal is down $3.10. The Dow Jones Industrial Average is up 203.72 points, and the NASDAQ is up 31.28 points. From Friday to Friday, livestock futures scored the following changes: December live cattle up $2.53, February live cattle up $2.90, November feeder cattle up $2.30, January feeder cattle up $3.47, December lean hogs up $0.47, and February lean hogs up $0.80.
LIVE CATTLE:
The past two weeks have basically been the cattle market's version of Mardi Gras. The last time cash cattle traded throughout the five-state region for an average of $130 was back in June of 2017 -- over four years ago! Feedlots decided to believe that if they took the market's fundamentals (higher boxed beef prices, strong processing speeds, lighter showlists, and a strong futures market) and held packers' feet to the fire, then they might stand a chance at rallying the market again, and lo and behold, they didn't come up emptyhanded. Feedlots wanted $130 and were willing to wait until the week's very end to get it, and come Friday morning, packers ended up paying the piper. Southern live deals traded for mostly $130 ($4 to $5 higher than last week), and Northern dressed cattle traded at mostly $204 ($4 higher than last week). As the market checks out for the weekend, the next thing we need to keep our eyes on come Monday will be the report that shows when the cattle bought this week were committed for delivery. If largely this week's purchases are confirmed for the nearby delivery, then the market stands a chance at continuing its progression. But if the cattle bought this week are confirmed for the deferred delivery, then steady trade is more likely. December live cattle closed $1.17 higher at $131.80, February live cattle closed $1.27 higher at $137.12, and April live cattle closed $1.17 higher at $140.
Friday's slaughter is estimated at 118,000 head -- 2,000 head less than a week ago and 7,000 head more than a year ago. Saturday's kill is projected to be around 45,000 head -- 15,000 head less than a week ago and 14,000 head less than a year ago.
Boxed beef prices closed lower: choice down $0.68 ($289.54) and select down $0.70 ($267.52) with a movement of 101 loads (59.11 loads of choice, 24.20 loads of select, 8.08 loads of trim and 9.69 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady to $1 higher. As I mentioned above, so much of next week's fate will depend on when the cattle that were bought this week are scheduled for delivery.
FEEDER CATTLE:
It was a good week for the feeder cattle complex, as support from the live cattle market helped boost the market and the corn market's regression came at the perfect time. November feeder cattle closed $0.85 higher at $158.87, January feeders closed $1.42 higher at $159.60 and March feeders closed $1.45 higher at $160.77. Demand for young females continues to be noted in sale barns, as buyers are seeing that they have several different options with them. Buy them and feed them. Buy them and spin them. Or buy them now and run them as cows later. The CME feeder cattle index 11/4/2021: down $0.54, $155.27.
Looking at the feeder cattle market, one can't help but be excited. The November feeder cattle contract closed Friday afternoon up $0.85 at $158.87. And looking way out into the fall of 2022, the October 2022 contract closed Friday afternoon at $175.52 -- holding a considerable $16.65 premium to today's market. There's one thing that will forever remain true about markets, and that's that they ALWAYS change. But upon thoroughly evaluating the market's fundamentals and understanding where the nation's cowherd sits in regard to the current cattle cycle, I don't believe the market is vastly out of line with its excitement for the fall of 2022. With fewer cows contributing calves to the marketplace, supplies are undoubtedly going to thin, and as long as demand remains ample, prices should beckon higher earnings.
The Oklahoma Weekly Cattle Auction Summary shared that compared to last week, throughout the entire state of Oklahoma, feeder steers traded steady to $2 lower, and feeder heifers traded $2 to $4 higher. Steer calves sold most steady and heifer calves traded steady to $3 higher.
LEAN HOGS:
It was anything but a simple week for the lean hog market. Pork cutout values endured whiplashing swings. Thursday's export report took everyone by surprise, as China was the second-largest buyer. And Saturday's kill is projected to be around 235,000 head, which means that packers see something promising to come down the pike. With the unsettling swings from the market's fundamental basis, the lean hog complex remains a tricky one. December lean hogs closed $1.32 lower at $76.55, February lean hogs closed $0.70 lower at $79.47 and April lean hogs closed $0.25 lower at $83.85. The CME lean hog index 11/3/2021: down $0.38, $78.32. Pork cutouts totaled 304.85 loads with 281.39 loads of pork cuts and 23.46 loads of trim. Pork cutout values: down $1.36, $96.33. Friday's kill is estimated at 475,000 head -- 1,000 head more than a week ago and 11,000 head less than a year ago. Saturday's kill is projected to be around 235,000 head -- 79,000 head more than a week ago and 20,000 head less than a year ago.
MONDAY'S CASH HOG CALL: Slightly higher. With packers being willing to boost Friday's cash market and with them planning to run a big Saturday kill, it wouldn't be surprising to see them somewhat aggressive in Monday's market.
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