GENERAL COMMENTS:
From Friday-to-Friday, livestock futures scored the following changes: December Live cattle up $1.57, February Live cattle up $2.15; January Feeder cattle off $1.22, March Feeder cattle up $2.35; December Lean hogs off $0.92, December Lean hogs off $0.92; December Pork cutout off $0.60, December Pork cutout off $0.60.
For as volatile as daily market moves were, weekly price shifts were generally subdued by the end of the week with light to moderate gains seen Friday in most markets. The swift gains and losses in cattle trade during the week seemed to create indecision through the market more than anything else, as traders seemed to be focusing on the potential direction of Friday's Cattle on Feed report. The report did not come out as bearish as feared, but reported numbers were sure not as bullish as could be hoped. The gap between these two levels is where traders find themselves as they assess current positions over the weekend, ahead of Monday's opening bell.
Hog prices closed lower on the Daily Direct Afternoon hog report, down $2.19 with a weighted average of $61.8 on 5,503 hogs. December corn closed down 7 3/4 at $4.67 and December soybean meal closed down $13.50 at $453.3. The Dow Jones Industrial Average is up 1.81 at 34,947.28.
LIVE CATTLE:
Live cattle futures ended Friday in positive territory as traders slowly but steadily adjusted to the liquidation seen Thursday and waited as patiently as possible for the afternoon release of the Nov. 1 Cattle on Feed report. Gains of $1 per cwt developed across the complex Monday, helping to create a positive gain for the week, despite the volatile up and down moves seen in daily trade throughout the week. Nearby contracts remain just above six-month market lows, which may limit some support heading into Thanksgiving week.
The November Cattle on Feed report posted total cattle on feed numbers of 11.9 million head. This is a 2% increase from year ago levels, which is fractionally below pre-report estimates. Although the increased on-feed numbers is not positive in itself, the lack of growth given lower than expected marketings of cattle during October does post some very positive indicators that could rekindle buyer support in the coming weeks.
Cash cattle markets seem to be finished for the week following moderate trade over the past two days. There are still a few bids in Nebraska at $22 per cwt Friday afternoon but unlikely to change the overall direction of prices seen previously. Southern live trade was seen at $178 per cwt, $2 to $3 per cwt lower, while Northern Dressed trade was mostly $282 per cwt $4 per cwt lower than last week's weighted average.
It will be interesting to see exactly what the weekly weighted average is when released Monday given the volatility in prices through the week.
December live cattle closed $1.00 higher at $175.75, February live cattle closed $1.48 higher at $176.80 and April live cattle closed $1.33 higher at $178.425.
Friday's slaughter is estimated at 121,000 head, 7,000 head higher than a week ago and 3,000 head less than a year ago. Saturday slaughter is expected to be 20,000 head. Week to date slaughter is expected to be 616,000 head.
Boxed beef prices closed mixed: choice down $0.85 ($293.87) and select up $3.05 ($270.70) with a movement of 84.63 loads (55.07 loads of choice, 12.21 loads of select, 4.02 loads of trim and 13.33 loads of ground beef).
MONDAY'S CATTLE CALL: Steady. Activity early Monday is expected to remain subdued Monday. Although, with Thanksgiving shortening the week, it is likely that any trade done next week will be accomplished by Wednesday.
FEEDER CATTLE:
Moderate gains moved into the feeder cattle complex Friday ahead of the Cattle on Feed report as traders backed away from previous liquidation and price erosion seen Thursday. Cattle placements in October increased 4% from year-ago levels with a total of 2.16 million cattle placed in feedyards during the month.
Even though the increased placement is not ideal, these numbers come in well short of pre-report estimates and are likely to create some longer term stability in the market. Cattle placements slipped slightly from previous month levels, which could indicate that the peak of placements have already passed for the year. This has been the question over the last month, if the early placements are an indication of more cattle to be placed than expected or if cattle are moving to feedyards faster than in previous years due to current conditions. It appears that the early season placements may be the answer to this question and could help bring additional price support to feeder cattle markets.
January feeders closed $1.00 higher at $228.5, March feeders closed $0.88 higher at $230.975 and April feeders closed $0.80 higher at $234.5. The CME Feeder Cattle Index for Nov. 15: down $0.12, $228.64.
LEAN HOGS:
Lean hog futures closed mixed in a very narrow range Friday afternoon with most of the trade attention still centered on the cattle market like it had been all week. The lean hog market seems very content hovering within the current sideways trading range, as market stability is developing not only in futures trade, but pork values and generally cash hog prices ahead of the Thanksgiving holiday week.
Limited market shifts or price direction is expected to be seen in the coming weeks, although the direction of pork prices will continue to have a more significant role in overall lean hog trade through the end of the year.
December lean hogs closed $0.50 lower at $70.975, February lean hogs closed $0.18 lower at $75.45 and April lean hogs closed steady. Friday's hog slaughter is estimated at 485,000 head, 35,000 head more than a week ago and even with a year ago. Saturday slaughter is expected at 246,000 head. Estimated week to date hog slaughter is 2.649 million head. Pork Cutouts totaled 248.09 loads with 220.23 loads of pork cuts and 27.86 loads of trim. Pork cutout values are up $2.24 at $88.16. The CME Lean Hog Index for Nov. 15: down $0.38, $75.68.
MONDAY'S HOG CALL: Steady to $1 lower. Heading into the Thanksgiving Holiday week, packers will try to frontload plant output. This could create some much needed stability to cash hog values despite the firm cash hog losses developing Friday.
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