GENERAL COMMENTS:
The livestock complex has been dealt a tough hand of cards this week. Pressure continues to burden the contracts and ultimately has pushed the live cattle, feeder cattle and lean hog futures lower as support seems near impossible to come by as traders aren't willing to stick their necks out and encourage a rally. March corn is down 5 cents per bushel and January soybean meal is down $0.30. The Dow Jones Industrial Average is down 21.22 points and NASDAQ is down 153.22 points.
LIVE CATTLE:
Live cattle futures have realized the market isn't going to get easier any time soon as fundamental support lags with the holiday approaching and technically traders aren't willing to do much of anything. December live cattle are down $0.77 at $136.00, February live cattle are down $1.35 at $136.95 and April live cattle are down $0.92 at $141.07. The two fundamental points feedlots can cling to are the fact that their showlists are extremely (EXTREMELY) current and, thankfully, processing speeds have been normal this week. Unfortunately, the market knows there most likely won't be much hope in keeping the cash cattle market trading any better than steady at its absolute best this week as packers have cattle committed for the weeks ahead. And with the holidays upon us, boxes are falling and processing speeds will see a dip in production. There has been a light trade in Nebraska at $218, which is $2.00 lower than last week's weighted average; other than that, the market is idle. Asking prices in the South remain at $140-plus and in the North at $222-plus.
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, which 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 are lower: choice down $0.09 ($260.63) and select down $0.14 ($248.66) with a movement of 106 loads (56.34 loads of choice, 15.41 loads of select, 5.87 loads of trim and 28.28 loads of ground beef).
FEEDER CATTLE:
Normally, you'd expect the feeder cattle contracts to be delighting in the fact that the corn market is struggling and thus rallying in the sight of corn trading 4 to 5 cents lower. But without an ounce of support from the live cattle complex, down feeder futures go. January feeders are down $0.47 at $164.10, March feeders are down $0.80 at $165.60 and April feeders are down $0.85 at $168.25. This week feeders are still seeing some demand from buyers as everyone knows this week is really the last chance to get anything bought before sale barns shut down for the holidays. But come next week, the market will be even more quiet as there isn't any action taking place throughout the countryside.
LEAN HOGS:
As the lean hog market has now officially moved past the December contract and is looking to February 2022 as the spot contract, the market hopes 2022 holds some heighted demand and potentially even stronger prices. So much will depend on how African swine fever is handled in foreign countries and how processing speeds fare here domestically. February lean hogs are down $1.02 at $79.05, April lean hogs are down $0.80 at $84.30 and June lean hogs are down $0.45 at $95.92. While producers are hopeful about what may come to fruition in 2022, they are also cautious as they've learned the hard way that an overabundance of supply never favors their position.
The projected CME Lean Hog Index for 12/14/2021 is up $0.20 at $72.30, and the actual index for 12/13/2021 is down $0.08 at $72.10. Hog prices are higher on the National Direct Morning Hog Report, up $0.30 with a weighted average of $58.88, ranging from $56.00 to $64.00 on 4,065 head and a five-day rolling average of $58.75. Pork cutouts total 161.58 loads with 128.60 loads of pork cuts and 32.98 loads of trim. Pork cutout values: up $4.87, $90.35.
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