GENERAL COMMENTS:
The cattle contracts ending up rounding out the Monday fully higher, but hogs struggled throughout the cash and futures markets. Feedlots have yet to disclose their asking prices for the week, but they aren't going to be easily persuaded into selling cattle for steady money this week. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.29 with a weighted average of $60.51 on 7,607 head. March corn is down 1/2 cent per bushel and January soybean meal is down $6.00. The Dow Jones Industrial Average is up 646.95 points and NASDAQ is up 139.68 points.
LIVE CATTLE:
The live cattle contracts grew stronger as the day traded on and ended up closing fully higher. December live cattle closed $0.50 higher at $138.17, February live cattle closed $0.70 higher at $139.65 and April live cattle closed $0.72 higher at $142.87. The cash cattle market didn't see any action develop throughout the countryside, and trade isn't likely to develop until Wednesday or potentially even later. Showlists are larger in all the major feeding areas, which may mean that packers try to whittle on the cash market. With the recent gain in leverage, feedlots won't easily be pushed around. Monday's slaughter is estimated at 122,000 head, 1,000 head more than a week ago and 3,000 head more than a year ago.
Last week's negotiated cash cattle trade totaled 112,080 head. Of that, 76% (85,680 head) were committed for the nearby delivery, while the remaining 24% (26,400 head) were committed for the deferred delivery. While the market is thankful to have successfully traded another week of higher prices and volume over 100,000 head, it's evident that packers are beginning to add to their deferred supply, which could be a hinderance to the market moving forward. Last week Southern live cattle traded from $140 to $142, but mostly at $142, which is $3.00 higher than the week before, and Northern dressed cattle traded from $217 to $221, but mostly at $220 which is $3.00 higher as well.
Boxed beef prices closed lower: choice down $1.83 ($272.53) and select down $0.79 ($257.85) with a movement of 116 loads (78.55 loads of choice, 21.26 loads of select, 6.36 loads of trim and 9.62 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady to $2.00 higher. Some may argue that with packers having committed 24% of last week's purchases for the deferred delivery that they aren't going to pushed into paying higher prices this week. It's equally as important to highlight that with packers running vigorous processing speeds their need for cattle is greater than normal as well.
FEEDER CATTLE:
A few of the summer 2022 corn contracts closed higher, but thanks to support that stemmed from the live cattle market, the feeder cattle contracts were able to round out the day fully higher. January feeders closed $1.12 higher at $165.25, March feeders closed $0.85 higher at $167.95 and April feeders closed $0.87 higher at $170.72. This week will likely see strong demand throughout the countryside as buyers look to getting their orders filled before the long holiday break. Sale barns usually take off at least two weeks around Christmas and the new year, so the market has a lot of cattle to process between now and the end of the month. The CME Feeder Cattle Index for Dec. 3: down $0.15, $160.43.
LEAN HOGS:
From a technical stance, the lean hog market took a beating, and while it's supportive to see the pork cutout market's higher close, it's hard to put much confidence in the value currently. December lean hogs closed $1.95 lower at $72.05, February lean hogs closed $3.27 lower at $78.22 and April lean hogs closed $2.22 lower at $83.65. The cash hog market didn't find any stronger interest before closing and it's likely that, with packers having been so aggressive last week, they don't support the market much at throughout this week's trade. Pork cutouts totaled 399.48 loads with 347.47 loads of pork cuts and 52.01 loads of trim. Pork cutout values: up $2.34, $83.71. Monday's slaughter is estimated at 460,000 head - 23,000 head less than a week ago and 28,000 head less than a year ago. The CME lean hog index 12/2/2021: down $0.33, $70.53.
TUESDAY'S CASH HOG CALL: Lower. With packers having bought a plethora of hogs in last week's cash market, it's unlikely that they are aggressive in this week's trade.
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