GENERAL COMMENTS:
The lean hog contracts saw some push back as the day neared it's close, but both the live cattle and feeder cattle contracts closed fully higher. The Quarterly Hogs and Pigs Report was found to be bullish, and the Cattle on Feed report was neutral. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.56 with a weighted average of $60.53 on 3,930 head. March corn is up 3 1/4 cents per bushel and March soybean meal is up $2.20. The Dow Jones Industrial Average is up 292.21 points and NASDAQ is up 166.35 points.
The Markets will be closed on Friday, Dec. 24 and DTN's comments will resume on Monday, Dec. 27. Thank you all for your readership; I pray that you take some time this week to cherish your loved ones and enjoy the holiday spirit.
LIVE CATTLE:
It was a quiet day throughout the cash market, but the futures market pulled off a commendable rally before heading out into Christmas weekend. December live cattle closed $1.30 higher at $137.05, February live cattle closed $2.25 higher at $139.62 and April live cattle closed $1.80 higher at $143.92. It helped that boxed beef prices ticked higher throughout the day, the cash cattle market demanded steady money on Wednesday and that the sheer number of cattle marketed in November came out 5% higher than a year ago in the latest Cattle on Feed report. So, all in all, it was a great way to round out the week's trade ahead of Christmas. There wasn't any cash cattle trade to really speak of, as packers finished most of their buying up on Wednesday. Thursday's slaughter is estimated at 117,000 head, 5,000 head less than a week ago and incomparable to a year ago. Thursday's actual slaughter data shared another new high in steer carcass weights for the year. For the week ending Dec. 11, steers gained a pound from the previous week to average 929 pounds, and heifers stayed steady from the previous report to average 851 pounds.
Beef net sales of 12,000 mt for 2021 were down 30% from the previous week and 23% from the prior four-week average. The three largest buyers were China (3,800 mt), Japan (3,700 mt) and South Korea (2,800 mt).
Boxed beef prices closed higher: choice up $1.08 ($262.94) and select up $2.12 ($252.95) with a movement of 91 loads (61.48 loads of choice, 15.23 loads of select, 6.96 loads of trim and 6.84 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady to $1.00 higher. Given that feedlots were able to strengthen the cash market this past week, there's a good chance that they can demand at least steady money, if not $1.00 or $2.00 more in next week's trade.
FEEDER CATTLE:
The feeder cattle contracts rounded out the week with phenomenal gains as the market closed more than $1.00 stronger in its nearby contracts and closed just shy of $1.00 stronger in its deferred contracts. January feeders closed $1.65 higher at $163.45, March feeders closed $1.82 higher at$163.75 and April feeders closed $1.82 higher at $167.37. Even though the corn market did close higher as well, feeders took the strength that stemmed from the live cattle market and rounded out the week fully higher. Given that sale barns won't be open next week, as we have one more week of odd holiday trading, the feeder cattle complex could wane lower given that they markets will likely only see modest interest. However, upon the new year's arrival, and once the market can get back to a normal schedule, demand could help drive prices higher especially if the cash cattle market is seeing strong interest from packers. The CME Feeder Cattle Index for Dec. 22: up $0.03, $160.28.
LEAN HOGS:
Though the USDA made a couple of revisions on the latest Quarterly Hogs and Pigs report that was shared Thursday afternoon, hog enthusiasts were pleased not to find any startling surprises. The biggest bullish conclusion stemmed from the fact that not only was the sheer number of hogs to be marketed lower, but the heaviest weight group (those weighing 180 pounds and more) were down 6% from a year ago at 12,853,000 head. This encourages producers, as they were hopeful that they'd see higher prices in the first quarter of 2022 and, with supplies being manageable, their aspirations may come true. The hog futures waned lower into Thursday's close even though the pork cutout market saw a fancy increase (up $6.80 higher), and the day's hog report was bullish. Largely the weaker close came as traders checked out for the holidays. February lean hogs closed $0.12 lower at $83.22, April lean hogs closed $0.05 lower at $86.65 and June lean hogs closed $0.20 lower at $97.30. Pork cutouts totaled 321.39 loads with 300.12 loads of pork cuts and 21.27 loads of trim. Pork cutout values: up $6.80, $91.47. Thursday's slaughter is estimated at 465,000 head, 7,000 head more than a week ago and incomparable to a year ago. Wednesday's hog slaughter was revised to 464,000 head, 10,000 head less than what was originally stated. The CME Lean Hog Index for Dec. 21: down $0.69, $72.33.
Pork net sales of 28,800 mt for 2021 were down 8% from the previous week but up 5% from the prior four-week average. The three largest buyers were Mexico (14,000 mt), South Korea (7,100 mt) and Japan (3,800 mt).
Thursday's actual slaughter data shared that for the week ending Dec. 11, hog live and dressed weights remained steady as live weights averaged 293 pounds and dressed weights averaged 218 pounds.
MONDAY'S CASH HOG CALL: Lower. Packers will likely be timid in Monday's market as they hope that workers show up following the holiday break and they have most of their supplies booked for the week ahead.
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