GENERAL COMMENTS:
The livestock complex closed mixed with the lean hog contracts rounding out the day lower, but the cattle contracts successfully rallied through Tuesday's end. A few Southern live cattle traded in the South at $191 which is steady with last week's weighted average. March corn is up 7 1/4 cents per bushel and January soybean meal is up $2.40. The Dow Jones Industrial Average is down 154.10 points.
LIVE CATTLE:
It was an exceptional day for the live cattle complex as the market saw traders help push the contracts higher, and some early sales were even noted in the cash cattle market. December live cattle closed $2.05 higher at $189.85, February live cattle closed $2.00 higher at $189.02 and April live cattle closed $1.70 higher at $190.65. Tuesday's higher end again puts the nearby contracts up against resistance levels, which will force traders to make a decision shortly. They'll either have to decide if they're going to find favor and momentum in the market's strong fundamentals, which would mean that the contracts are going to break above resistance, or they're going to decide that there simply isn't enough strength in the market currently to justify such a move. And as always, time will tell. A light trade has been reported in Kansas at $191 which is fully steady with last week's market. Asking prices remain firm for cattle in the South at $192 plus and are still not established for cattle in the North. Tuesday's slaughter is estimated at 120,000 head -- 5,000 head less than a week ago and 6,000 head less than a year ago.
Tuesday's WASDE report shared mostly positive news for the cattle and beef markets of 2024 and 2025. For 2024, beef production was raised by 10 million pounds as the fed cattle slaughter has been more aggressive than originally assumed, and carcass weights remain historically high. For 2025, beef production was decreased by 615 million pounds as the restrictions on cattle imports from Mexico will result in lighter placements in the first half of 2025, and consequently, fewer cattle to process in the second half of 2025. Steer price projections for the fourth quarter of 2024 remained unchanged at $188, but steer price projections for the first quarter of 2025 averaged $188 (steady with last month's data), steer prices in the second quarter of 2025 are expected to average $187 (up $2.00 from last month) and steer prices are expected to average $192 (up $6.00 from last month) in the third quarter of 2025. Beef imports for 2024 were increased by 80 million pounds, while 2024 exports remained unchanged. Meanwhile beef imports for 2025 increased by 195 pounds, but beef exports were decreased by 105 million pounds.
Boxed beef prices closed lower: choice down $2.41 ($311.73) and select up $0.31 ($279.65) with a movement of 129 loads (73.39 loads of choice, 22.08 loads of select, 13.71 loads of trim and 19.80 loads of ground beef).
WEDNESDAY'S CATTLE CALL: Steady to $2.00 higher. With cash cattle beginning to trade for steady prices this early in the week, it leads one to believe that packers are short bought and are desperate to get cattle bought and that prices could trade higher later in the week.
FEEDER CATTLE:
The feeder cattle complex wasted no time trading higher through Tuesday's market as the sector found the additional support it was looking for as the live cattle market rallied alongside it. The feeder cattle complex has been carrying the bulk of the market's weight as it's been the driving force behind the cattle contracts, so seeing the live cattle contracts come to life and rally aggressively was like a breath of fresh air for the market. January feeders closed $1.52 higher at $257.32, March feeders closed $2.25 higher at $257.45 and April feeders closed $2.10 higher at $258.35. With Tuesday's sizeable surge, the complex is again nearing resistance levels, which will be important to monitor in the upcoming days as demand could influence traders to push beyond current resistance points, but whether or not traders will do so remains yet to be seen. At Joplin Regional Stockyards in Carthage, Missouri compared to last week feeder steers sold $7.00 lower to $12.00 higher, with most of the gains on the lighter weight calves. Feeder heifers traded steady to $15.00 higher, with the biggest daily advancement on the three weight heifers. Feeder cattle supply over 600 pounds was 65%. The CME feeders cattle index 12/9/2024: down $0.63, $261.62.
LEAN HOGS:
The lean hog complex endured a stressful day as the nearby contracts drifted anywhere from $1.00 to $2.00 lower which was partly pressured because of the market's continued disappointment in consumer demand. February lean hogs closed $1.92 lower at $84.57, April lean hogs closed $2.30 lower at $88.90 and June lean hogs closed $1.82 lower at $100.15. Packers were undoubtedly short bought coming into this week as Tuesday's volume in the cash market is rarely seen -- as just over 9,000 head traded. The carcass price again fell lower as the market saw most of its major cuts close lower, but the biggest draining factor today was the rib which closed $5.66 lower and the butt which closed $2.04 lower. Pork cutouts totaled 350.20 loads with 309.04 loads of pork cuts and 41.16 loads of trim. Pork cutout values: down $0.49, $93.14. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.09 with a weighted average price of $82.11 on 9,458 head. The CME lean hog index 12/6/2024: down $0.27, $83.46.
WEDNEDSAY'S HOG CALL: Lower. It's very rare that we see a single day's trade of over 9,000 head in the cash market. But depending on how short bought packers were, they could still need some hogs.
Tuesday's WASDE report shared mostly supportive news for the pork and hog markets of 2024 and 2025. Pork production for 2024 decreased by 35 million pounds as carcass weights are lighter than originally assumed. This trend continued into 2025 as once again lighter carcass weights pushed 2025 production levels to 28,370 million pounds, which is down 30 million pounds from last month's estimate. The quarterly price projections were encouraging for the hog complex as hog prices in the fourth quarter of 2024 are expected to average $62 (up $2.00 from last month), hog prices in the first quarter of 2025 are expected to average $60 (up $2.00 from last month), hog prices in the second quarter of 2025 are expected to average $65 (up $3.00 from last month) and hog prices in the third quarter of 2025 are expected to average $68 (up $5.00 from last month). Pork imports for 2024 were decreased by 15 million pounds, but pork exports for 2024 were also decreased by 35 million pounds. Pork imports for 2025 were decreased by 50 million pounds and pork exports for 2025 were decreased by 30 million pounds.
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