GENERAL COMMENTS:
Cattle futures were desperate for some fundamental support and upon seeing the market's stronger cash trade and higher boxed beef prices, both live and feeder cattle contracts shot higher. Meanwhile the lean hog complex isn't overly confident in its position as largely the market is chopping sideways. March corn is up 2 cents per bushel and March soybean meal is down $1.40. The Dow Jones Industrial Average is up 43.17 points and NASDAQ is down 61.73 points.
LIVE CATTLE:
It's amazing how when the fundamental and technical sides of the market work together how strong a rally truly can be. Seeing Tuesday afternoon's cash cattle trade in the North where most deals were for $220 (which is $3.00 higher than last week) but some late trade came in for $221 to $222 -- the cattle complex has grown resilient and is striding out with an impressive rally. February live cattle are up $1.97 at $141.40, April live cattle are up $1.87 at $145.82 and June live cattle are up $1.35 at $139.65. There are bids of $140 and $222 on the table in Iowa and Nebraska, but the South is still quiet as a church mouse. Asking prices are around $140-plus in the South and $224 in the North. Feedlots are hard pressed to get any cattle gone given they are extremely current on their showlists and they know packers are close to the knife. The fact that the market is rallying as aggressively as it is this week bodes extremely well for the market next week and processing speeds will be back to normal and packers will need to get cattle on the books.
The Fed Cattle Exchange Auction listed a total of 1,303 head (Kansas 1,162 head, Nebraska 141 head), all of which went unsold, as they did not meet the reserve prices, which ranged from $137.75 to $140. Opening prices ranged from $135 to $138, high bids ranged from $137.75 to $138.50. Another auction is scheduled for Thursday; we will see if it has better results.
Boxed beef prices are higher: choice up $1.21 ($265.87) and select up $1.11 ($257.20) with a movement of 79 loads (48.43 loads of choice, 10.90 loads of select, 8.61 loads of trim and 11.42 loads of ground beef).
FEEDER CATTLE:
With the corn contracts only trading 1 to 3 cents higher and the live cattle market pushing gains on the board and significant gains throughout the countryside -- the feeder cattle market feels free to trade higher and to do so in a confident manner. While it's utterly exciting to see the contracts trading higher through the odd spell between Christmas and the New Year holiday, what's even more exciting is the fact that next week when sale barns get back to their normal schedule they'll likely be met with extremely strong demand as strong cash cattle prices make buyers eager to get feeders and calves bought. January feeders are up $1.77 at $165.32, March feeders are up $2.55 at $167.77 and April feeders are up $2.25 at $170.80.
LEAN HOGS:
Lean hog futures have flopped from Tuesday's trend as now the nearby contracts are trading higher and the deferred contracts are being faced with modest resistance. Helping the market is the slightly stronger cash prices that Wednesday morning was welcomed with. But midday pork cutout prices are slightly weaker (we will know more on pork cutouts at the day's end). February lean hogs are up $0.92 at $83.55, April lean hogs are up $0.30 at $87.85 and June lean hogs are down $0.25 at $98.37.
The projected CME Lean Hog Index for 12/24/2021 is up $0.66 at $71.82, and the index for 12/23/2021 is down $0.49 at $71.16. Hog prices are higher on the National Direct Morning Hog Report, up $0.65 with a weighted average of $60.83, ranging from $58.00 to $62.00 on 4,621 head and a five-day rolling average of $60.49. Pork cutouts total 149.82 loads with 136.69 loads of pork cut and 13.13 loads of trim. Pork cutout values: down $0.86, $86.03.
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