GENERAL COMMENTS:
Following several weeks of overall supply uncertainty in the cattle markets, Tuesday seemed to be the first day that traders were not overly focused on short- or long-term supply level shifts in the cattle market. This left prices generally unsupported due to limited trade volume, and traders are now focusing on Thanksgiving preparations, and likely early Black Friday savings.
Pressure seen in all livestock contracts through the cattle and hog complex continues to be less directed on a strategic plan to push prices lower and more on overall lack of interest and activity. Hog futures were once again under pressure, but announcements by Chinese officials stating that the Chinese domestic hog herd was "too large" sparked additional concern of support in the pork industry. Hog prices closed lower on the Daily Direct Afternoon hog report, down $6.19 with a weighted average of $61.03 on 11,401 hogs. December corn closed up 1/2 at $4.7 and January soybean meal closed down $1.30 at $442. The Dow Jones Industrial Average is down 62.75 at 35,088.29.
LIVE CATTLE:
Live cattle futures closed lower in limited, but softer trade Tuesday. The back-and-forth shifts in cattle markets over the past couple of weeks have seemingly left some traders weary and looking for a break. The upcoming Thanksgiving holiday is likely to be the break that many of these traders are looking for, with all indications that some traders are willing and able to step out of the market during the holiday week.
Very little fundamental or technical market factors seemed to be focused on Tuesday, as overall lack of buyer support and direction allowed prices to wander lower throughout the trading session. Limited light trade is also expected Wednesday and Friday, which could leave to additional market swings in either direction without any significant driving factors.
Cash cattle trade was still quiet Tuesday afternoon, although a few bids are being offered and passed on at $278 to $280 per cwt dressed basis in Nebraska. Active asking prices are still not widely seen and it may be Wednesday before active interest develops from either side. Both sides would desire to trade cattle before the holiday break, which may put emphasis on late Wednesday activity.
December live cattle closed $0.48 lower at $175., February live cattle closed $0.58 lower at $176.075 and April live cattle closed $0.50 lower at $178.225.
Tuesday's slaughter is estimated at 126,000 head, steady with a week ago and 366,000 head less than a year ago.
Boxed beef prices closed mixed: choice up $0.06 ($295.81) and select down $2.18 ($268.77) with a movement of 166.37 loads (119.33 loads of choice, 24.67 loads of select, 10.39 loads of trim and 11.98 loads of ground beef).
WEDNESDAY'S CATTLE CALL: Steady. More interest is expected to be seen early Wednesday with the focus on trading cattle before Thanksgiving. Activity levels could develop once both sides focus on agreeable price ranges.
FEEDER CATTLE:
Firm pressure is seen in feeder cattle futures with January and March futures holding triple-digit losses at the closing bell. Very limited direction was seen across the complex, although any sense of buyer activity was hard to find through the Tuesday trading session. It appears that traders seem to be relatively comfortable with where markets are in relation to current supply levels heading through the end of the year and early 2024. Weather conditions in the upcoming weeks and the ability to move unsold feeder cattle through sales barns and into feedlots will likely be a bigger factor through the rest of 2023.
January feeders closed $1.53 lower at $228.325, March feeders closed $1.08 lower at $231.225 and April feeders closed $0.93 lower at $234.9. The CME Feeder Cattle Index for Nov. 17: up $0.84, $226.76.
LEAN HOGS:
Lean hog futures posted the most significant losses of all livestock trade Tuesday and had the sharpest one-day loss in nearby contracts since early October.
Announcements from China about the size and growth in their domestic hog herd not only put pressure on global pork and hog prices, but also caught the attention of the lean hog complex.
December through April contracts posted losses over $2 per cwt, causing concern of further pressure. The holiday week activity, which limited overall interest and volume in the market, also added to the softness. Trade activity is likely to remain subdued through the entire week, but the swift price losses Tuesday could add to the potential market volatility in the upcoming days.
December lean hogs closed $2.18 lower at $68.175, February lean hogs closed $2.73 lower at $72.325 and April lean hogs closed $2.35 lower at $78.625. Tuesday's hog slaughter is estimated at 486,000 head, 13,000 head more than a week ago and 2,000 head less than a year ago. Pork Cutouts totaled 344.96 loads with 300.27 loads of pork cuts and 44.69 loads of trim. Pork cutout values are down $0.88 at $85.21. The CME Lean Hog Index for Nov. 17: down $0.57, $74.52.
TUESDAY'S HOG CALL: Steady to $1 lower. Cash markets are expected to remain unsettled through the week. Packers continue to push processing limits early in the week due to the upcoming holiday schedules. Continued pressure in cash values early in the week and futures market softness is likely to add to cash market pressure.
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