GENERAL COMMENTS:
Cattle futures were the center of attention Monday with active losses seen in all contract months. Feeder cattle futures set the weaker tone of the market with sharp triple-digit losses developing early, but continuing to show weakness through the entire session. Monday's moves broke through last week's support price levels, causing markets to move to new multi-month lows for the last two Monday's in a row. The inability to hold support levels in live cattle and feeder cattle trade is adding to the already weak market structure and sparking technical pressure.
Hog futures were more positive with actively traded February futures posting a 70-cent loss, helping to lead buyers back into 2024 contract months during early week trade. Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.07 with a weighted average of $55.53 on 8,043 hogs. March corn closed up 3/4 at $4.855 and January soybean meal closed down $4.40 at $408.3. The Dow Jones Industrial Average is down 41.06 at 36,204.44.
LIVE CATTLE:
Live cattle futures essentially started this week where traders left off last Friday, with limited, if any market support and concerns that additional technical pressure may continue to develop. Lower movement early in the session in cattle futures was sparked by aggressive liquidation continuing in feeder cattle trade. At this point, the live cattle market seems to be driven by the less active feeder cattle market, as buyer support can't seem to get a good footing in order to even become established in the market. Nearby contracts consistently posted $2 per cwt losses, creating softness through the entire complex, and maybe even more significantly, breaking through last week's support levels.
The market volatility seen over the past couple of weeks is adding to even more market swings as traders are trying to adjust, not even getting a chance to take into account longer term fundamental market shifts. These recent losses could lead to additional price swings through the week. Cash cattle markets remain quiet with both sides remaining on the sidelines. Asking prices and bids are undeveloped and very well could remain silent over the next couple of days.
Showlists are generally mixed -- higher in Kansas, Nebraska, Colorado and lower in Texas. Cash prices fell last week with the five-area weekly weighted average moving to $174.45 per cwt, down $2.32 per cwt from the previous week. It easily could be the second half of the week until active trade develops. December live cattle closed $2.03 lower at $167.25, February live cattle closed $2.05 lower at $167.075 and April live cattle closed $1.93 lower at $169.70.
Monday's slaughter is estimated at 125,000 head, 2,000 head more than a week ago and 367,000 head less than a year ago.
Boxed beef prices closed lower: choice down $2.74 ($294.72) and select down $2.66 ($262.83) with a movement of 169.22 loads (82.11 loads of choice, 23.63 loads of select, 27.47 loads of trim and 36.01 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady to $2 lower. Continued pressure in futures trade is likely to limit early week movement. The focus on bringing stability to the market seems to be the focus as the week continues.
FEEDER CATTLE:
Feeder cattle futures led the market lower once again Monday with all contracts falling $3.50 to $4 per cwt lower at the closing bell. The combination of last week's market shift and follow-through pressure that broke through last Monday's support price levels sparked additional technical liquidation in all contract months.
Although the market remains oversold, there has not been an opportunity of inactive selling activity for buyers to step into the complex. This is also creating the potential for moderate to wide price swings in either direction through the week as light volume market momentum will likely be quickly shifted. Feeder cattle futures are now once again trading at multi-month lows, breaking through these support levels each of the last two month's. The concern of uncertain fundamental growth through the upcoming weeks and months, could limit the depth of buyer interest during early December.
January feeders closed $3.90 lower at $210.525, March feeders closed $3.65 lower at $213.575 and April feeders closed $3.75 lower at $217.425. The CME Feeder Cattle Index: down $2.62, $223.27.
LEAN HOGS:
Lean hog futures closed lower in the lightly traded December contracts, but firm buyer support slowly and steadily moved into all other contract months as traders focused on continued buyer support during early December. The pressure in cattle trade had limited impact on the overall lean hog complex, allowing spring and early summer contracts to move as much as $1.17 per cwt higher in late day buyer support.
December lean hogs closed $0.55 lower at $68.05, February lean hogs closed $0.70 higher at $70.80 and April lean hogs closed $1.18 higher at $77.55. Monday's hog slaughter is estimated at 488,000 head, 12,000 head more than a week ago and 0 head less than a year ago. Pork Cutouts totaled 312.34 loads with 271.18 loads of pork cuts and 41.16 loads of trim. Pork cutout values are up $0.88 at $84.43. The CME Lean Hog Index for Nov. 30: down $0.77, $70.58.
TUESDAY'S HOG CALL: Steady to $1 higher. Firming buyer support seems to be developing across the lean hog complex. This is expected to help stimulate steady to higher cash prices as the week continues and packers focus on full runs over the next couple of weeks.
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