GENERAL COMMENTS:
The livestock complex rounded out Thursday mixed as the hog complex was pleased to find some technical footing which allowed its contracts to close higher, but the cattle complex ended the day slightly lower. Some more cash cattle trade could develop Friday, but largely it's looking like the bulk of this week's trade is done. March corn is down 4 3/4 cents per bushel and January soybean meal is down $1.60. The Dow Jones Industrial Average is down 234.44 points.
Thursday's export report shared that beef net sales of 11,000 metric tons (mt) for 2024 were up noticeably from the previous week and up 32% from the prior 4-week average. The three largest buyers were South Korea (3,400 mt), Japan (3,400 mt) and Mexico (1,400 mt). Pork net sales of 22,500 mt for 2024 were down 36% from the previous week and 1% from the prior 4-week average. The three largest buyers were Mexico (9,100 mt), Japan (4,500 mt) and China (2,700 mt).
LIVE CATTLE:
Although the live cattle contracts rounded out Thursday lower, it was quite interesting to watch the cash cattle market throughout the day as bids of $305 were offered in the North. Heading into this week we knew packers were likely short-bought, but their willingness to advance the cash market to $305 in the North tells us they're extremely short-bought and desperate to get some supply built up around them. And until they have a plethora of supply committed to them, the cash cattle market stands to be a horse race where feedlot mangers are primed to be winning and riding the prized horse week in and week out so long as demand remains sufficient. December live cattle closed $0.12 lower at $192.12, February live cattle closed $0.52 lower at $190.85, and April live cattle closed $0.45 lower at $192.17. Some more light trade was reported throughout the day in the North, but largely the market was quiet. So far this week Southern live cattle have traded for mostly $191 to $192 which is steady to $2.00 higher than last week's weighted average, and Northern dressed cattle have traded at mostly $300 which is $3.00 higher than last week's weighted average.
Thursday's slaughter is estimated at 125,000 head -- 7,000 head more than a week ago and 1,000 head more than a year ago.
Boxed beef prices closed higher: choice up $4.01 ($315.24) and select up $2.37 ($280.48) with a movement of 135 loads (87.57 loads of choice, 31.34 loads of select, 3.74 loads of trim and 12.62 loads of ground beef).
FRIDAY'S CATTLE CALL: Higher. It will be especially interesting to see if packers get any cattle bought Friday. If they do, I believe it will be for higher prices as feedlot managers know they control the cash market right now. And if packers don't get any more cattle bought Friday, I believe it will likely be because feedlot managers are wanting to keep packers from getting too much supply built up around them which would hinder the cash market in the weeks to come.
FEEDER CATTLE:
The feeder cattle complex stalled out as the market noticed the lower trend of the live cattle complex which immediately deterred its own rally. The feeder cattle complex is currently trading at its resistance threshold ($260 in the spot January contract) which remains a difficult level for the market to overcome. Thursday's lower dip isn't because of a lack of fundamental support, but rather instead because of a change in morale throughout the futures complex. January feeders closed $0.70 lower at $258.35, March feeders closed $0.80 lower at $258.57, and April feeders closed $0.95 lower at $259.22. At Winter Livestock Auction in Dodge City, Kansas, compared to last week feeder steers under 650 pounds sold steady to $5.00 lower while steers over 650 pounds traded steady to $3.00 lower. Heifers over 500 pounds sold $8.00 lower, and the heifers not over 600 pounds were not well tested. Slaughter cows sold steady to $3.00 higher. Feeder cattle supply over 600 pounds was 54%. The CME Feeder Cattle Index 12/11/2024: up $1.61, $263.07.
LEAN HOGS:
The lean hog complex was able to round out Thursday higher as traders found some technical support at Wednesday's close. It would have been nice for the market to also receive some fundamental support in the form of stronger pork demand -- but both cash prices and pork cutout values closed lower. It's not bewildering to see cash prices lower as packers were extremely aggressive in the market earlier this week, but it continues to remain problematic for the sector that demand isn't stronger. Today's biggest reason why the carcass prices wasn't able to end higher is because of the $9.39 decline in the belly. February lean hogs closed $0.10 higher at $84.47, April lean hogs closed $0.20 higher at $88.45, and June lean hogs closed $0.25 higher at $99.77. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.37 with a weighted average price of $79.02 on 1,918 head. Pork cutouts totaled 227.64 loads with 200.40 loads of pork cuts and 27.24 loads of trim. Pork cutout values: down $0.56, $92.31. Thursday's slaughter is estimated at 478,000 head -- 6,000 head more than a week ago and 9,000 head less than a year ago. The CME Lean Hog Index 12/10/2024: up $0.28, $83.61.
FRIDAY'S HOG CALL: Lower. It's likely the cash hog market will see very little interest from packers on Friday as largely their buying is done for the week.
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