GENERAL COMMENTS:
It's not likely that the morale surrounding the livestock complex is going to get better before the new year, as the market has to work its way through the holidays. Heading into Thursday's trade, the market will be paying close attention to how the day's export report fairs, as well as the afternoon's carcass data. Hog prices closed higher on the National Direct Afternoon Lean Hog Report, up $0.57 with a weighted average of $61.07 on 6,810 head. March corn is down 4 1/2 cents per bushel and January soybean meal is down $4.70. The Dow Jones Industrial Average is up 269.94 points and NASDAQ is up 254.50 points.
LIVE CATTLE:
Packers have had enough with the notion of paying higher cash cattle prices, and this week their wishes came true as they were able to buy cattle in both the North and South for $2.00 to $4.00 lower than last week's weighted average. The futures market fell lower once again this week as the market absorbed the cash market's lower trade and stomached losses again in the boxed beef market. December live cattle closed $1.77 lower at $135.00, February live cattle closed $1.72 lower at $136.57 and April live cattle closed $1.07 lower at $140.92. There was some dressed cattle that traded in the North for mostly $218, which is $2.00 lower than last week, and some Southern live cattle traded for $136, which is $4.00 less than last week's average. At this rate, the damage is most likely done and any cattle left to trade will likely trade with the week's trend.
Wednesday's slaughter is estimated at 120,000 head, 2,000 head less than a week ago and 2,000 head more than a year ago.
The Fed Cattle Exchange Auction listed a total of 1,331 head (Texas 1,206 head, Kansas 125 head), of which none actually sold, as they did not meet the reserve prices, that ranged from $138 to $139. Opening prices ranged from $136 to $138, high bids ranged from $136 to $137. Another auction is scheduled for Thursday, hopefully with better results.
Boxed beef prices closed lower: choice down $0.46 ($260.26) and select down $1.35 ($247.45) with a movement of 174 loads (88.31 loads of choice, 35.52 loads of select, 7.39 loads of trim and 42.45 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady with the week's trend. Seeing that cattle have now traded in both regions, any cattle left to trade will most likely trade with the week's trend. Feedlots aren't desperate to puke cattle so some could decide to hold on to what they have until prices get better again.
FEEDER CATTLE:
The feeder cattle market's morale didn't improve as the day traded through the afternoon, and it's likely that the market sees this type of doggish attitude throughout the remainder of the week as the holiday slum starts to work its way into the markets already. January feeders closed $1.15 lower at $163.42, March feeders closed $1.92 lower at $164.47 and April feeders closed $1.75 lower at $167.35. Buyers know that realistically this week is their last chance to get any calves/feeders bought ahead of the new year as next week through the first of 2022 most sale barns will be closed. At Kingsville Livestock Auction in Kingsville, Missouri, compared to last week, steer calves under 650 pounds sold $3.00 to $6.00 higher, and the heavier weighted steers sold steady. Heifer calves under 500 pounds traded $3.00 to $5.00 higher with the heavier weights trading steady as well. The CME Feeder Cattle Index for Dec. 14: Steady, $161.77.
LEAN HOGS:
Just like it's affecting the cattle contracts, the lean hog complex is feeling the glut of the holidays affecting its marketplace, as hog futures closed lower. February lean hogs closed $0.75 lower at $79.32, April lean hogs closed $0.90 lower at $84.20 and May lean hogs closed $0.77 lower at $89.42. There's still a lot of premium built into the 2022 contracts compared to what prices are currently, but the market is still skeptical of what's all going to come to fruition and what's going to be wishful thinking. Thankfully, hog producers are sitting in a rewarding position in regard to supplies, and if demand spikes then the market undoubtedly has the opportunity to trend higher so long as packers can run somewhat of an aggressive chain speed. Pork cutouts total 260.30 loads with 221.68 loads of pork cuts and 38.62 loads of trim. Pork cutout values: up $2.35, $87.83. Wednesday's slaughter is estimated at 470,000 head, 2,000 head less than a week ago and 15,000 head less than a year ago. Tuesday's slaughter was revised to 467,000 head, 16,000 head less than what was originally stated. The CME Lean Hog Index for Dec. 13: down $0.08, $72.10.
THURSDAY'S CASH HOG CALL: Steady. With packers having supplies committed for the weeks ahead, it's unlikely that they will push the market too much higher.
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