GENERAL COMMENTS:
Livestock futures are starting the week on a strong note as the hog market continues to find technical support, feeder cattle contracts aren't being pressured by a rallying corn market and the live cattle complex is thankful to see packers are still pulling cattle. December corn is down 3 cents per bushel and December soybean meal is up $12.70. The Dow Jones Industrial Average is up 15.87 points and NASDAQ is down 59.84 points.
LIVE CATTLE:
It's been right at a year since the market has seen packers buy more than 110,000 head in the cash cattle market and one can't help but feel excited for the rally that feedlots have pushed throughout the market. It's exciting to see the vast majority (76%) of the cattle procured last week are committed for nearby delivery, which continues to signal to feedlots that packers need cattle and they're close to the knife. So long as packers don't start stacking up supplies for deferred delivery, then theoretically they should need to continue to support the cash market in the weeks ahead. Boxed beef prices saw some minor pressure last week but as long as they trade mostly steady and as long as processing speeds continue to clip through cattle aggressively, the cash cattle market sits in a strong position to continue to demand higher prices. December live cattle are down $0.05 at $132.07, February live cattle are up $0.42 at $136.52 and April live cattle are up $0.20 at $140.10. New showlists appear to be somewhat lower in Nebraska and Colorado but lower in Kansas, and Texas.
Last week's negotiated cash cattle trade totaled 118,797 head. Of that 76% (90,227 head) were committed for the nearby delivery, while the remaining 24% (28,570 head) were committed for the deferred delivery of the following 15 to 30 days.
Boxed beef prices are lower: choice down $1.40 ($282.90) and select down $0.92 ($268.61) with a movement of 39 loads (23.07 loads of choice, 12.78 loads of select, zero loads of trim and 2.91 loads of ground beef).
FEEDER CATTLE:
With the November feeder cattle contract set to expire Thursday, the market's heartbeat now lies in the January 2022 contract. January feeders are up $0.22 at $157.95, March feeders are up $0.22 at $159.40 and April feeders are up $0.12 at $161.90. The market can rally as pressure from the corn market has subsided, but the soybean meal market is still rallying, which could pull the corn market higher before too long. The week's trajectory will depend on whether the live cattle market can offer some support to the complex, and whether the grain markets shoot for the sky again. Despite the grain market's rally last week, buyers throughout the countryside remained active in the market and were especially aggressive in buying lighter-weight calves, as opposed to heavier-weighted feeders. The lighter-weight calves offer more options as they can be put on grass, wheat pasture or put in the feedlots, whereas the feeders don't offer as much flexibility.
LEAN HOGS:
It's a battle between the inner-most forces in the current lean hog market. The market's fundamentals aren't a rose-colored picture as pork cutout values are volatile, choppy and highly unpredictable; the cash hog market continues to feel added pressure day in and day out as hog supplies are ample for packers to pick through. Meanwhile, the futures market is chomping at the bit, ready to push the market higher as 2022 holds some opportunity. From now until the beginning of the New Year it's likely the lean hog market will continue to see volatile trade as the market tries to discern between the long-term trajectory and the pressure of here and now. December lean hogs are steady at $75.87, February lean hogs are up $0.47 at $81.02 and April lean hogs are up $0.20 at $85.42.
The projected CME Lean Hog Index for 11/11/2021 is down $1.27 at $76.68, and the actual index for 11/10/21 is down $0.77 at $77.95. Hog prices are lower on the National Direct Morning Hog Report, down $0.13 with a weighted average of $57.81, ranging from $57.00 to $58.00 on 4,659 head and a five-day rolling average of $57.95. Pork cutouts total 164.16 loads with 147.80 loads of pork cuts and 16.36 loads of trim. Pork cutout values: up $7.49, $102.20.
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