GENERAL COMMENTS:
Livestock futures remain mixed in light to moderate trade on Monday afternoon. Limited early outside market direction left many livestock traders on the sidelines searching for additional direction, late day moves in financial and energy markets narrowed early gains in the cattle complex. Cattle futures moved higher with morning gains establishing strong gains, but a minimal pullback through the last half of the session made market shifts less impressive. Hog futures shifted lower with traders attempting to square positions following recent strong market support. Hog prices closed higher on the Daily Direct Afternoon hog report, up $0.89 with a weighted average of $81.02 on 7,402 hogs. March corn closed up 1 3/4 at $4.418 and January soybean meal closed up $2.20 at $289.6. The Dow Jones Industrial Average is down 240.59 at 44,401.93.
LIVE CATTLE:
Live cattle recorded solid early week gains Monday afternoon, but nearby futures quickly pulled back from morning price support as limited follow through interest was seen in the last two hours of trade. Nearby live cattle futures posted early gains over $1 per cwt and held these gains through midday with limited distractions from grain trade, and firm prices move in beef values on the midday report. But due to the light trade volume and lack of depth in buy orders, these gains slowly slid through the end of the Monday trading session. The positive close is still creating momentum for potential gains as the week continues. Cash cattle markets remain rather quiet this afternoon as it is shaping up to be a typical Monday. Bids and asking prices are not established, and significant trade volume will likely be delayed until much later in the week. New showlists appear to be mixed, higher in Kansas and Texas, but lower in Nebraska/Colorado. December live cattle closed $0.43 higher at $187.8, February live cattle closed $0.85 higher at $187.025 and April live cattle closed $0.65 higher at $188.95.
Monday's slaughter is estimated at 119,000 head, 2,000 head more than a week ago and 6,000 head less than a year ago.
Boxed beef prices closed higher: choice up $2.10 ($314.14) and select up $2.61 ($279.34) with a movement of 88.49 loads (47.27 loads of choice, 15.00 loads of select, 10.91 loads of trim and 15.31 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady to $2 Higher. Limited activity is expected until the last half of the week, but the continued support in beef values, futures trade and cash market support last week is expected to create expectations of higher asking prices, and potential offers during this week's cash cattle trade.
FEEDER CATTLE:
Feeder cattle traded closed mixed to mostly higher Monday afternoon following the ability to hold moderate to firm gains through most of the trading session. Spot January futures were the only contract to trade lower at the closing bell with all other contracts holding 45 to 67 cent gains. The continued support seen across the complex since the middle of November is not only holding prices well above both 40 and 100-day moving averages, but the potential to test summer highs before the end of the year could stimulate additional speculative buying support heading into the holidays. January feeders closed $0.03 lower at $255.8, March feeders closed $0.53 higher at $255.2 and April feeders closed $0.68 higher at $256.25. The CME Feeder Cattle Index for December 6: up $0.42, $262.25.
LEAN HOGS:
Lean hog futures eroded Monday, with moderate pressure seen in the December through April contract months. Even with the early week price pressure, contracts remain near short-term resistance levels and well above the 40-day moving average. Early day pressure in morning cash hog and pork values seemed to limit follow through buying interest, but the overall tone of the market still remains firm. Traders continue to aggressively point to summer contract prices near contract high levels, which could further stimulate buyer interest in the coming days. The pullback in financial markets had a limited impact on lean hog price direction, allowing traders to further assess market direction later in the week. December lean hogs closed $0.40 lower at $82.9, February lean hogs closed $0.83 lower at $86.5 and April lean hogs closed $0.65 lower at $91.20. Monday's hog slaughter is estimated at 489,000 head, 0 head less than a week ago and 26,000 head more than a year ago. Pork cutouts totaled 344.51 loads with 298.41 loads of pork cuts and 46.10 loads of trim. Pork cutout values are up $2.47 at $93.63. The CME Lean Hog Index for December 6: down $0.27, $83.46.
TUESDAY'S HOG CALL: Steady. Limited support in cash hogs prices and underlying pressure may continue to limit higher price levels early Tuesday.
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