GENERAL COMMENTS:
Live cattle futures closed $3.60 lower on the December contract and posted smaller losses on the deferred months. While the stock market pressure certainly was not helpful, live cattle have been faced with their own challenges this week. For cattle ready to go to slaughter, it is difficult to find bids available as weights increase while they wait to ship. Cash prices traded lower on Thursday as packers have plenty of offers to choose from. Nebraska saw $214 to $219 live traded or $335 to $342 dressed. Iowa and Minnesota were weaker at $208 to $218 live or $332 to $345 dressed. The Feeder Cattle Index has fallen hard this week as well with daily auction results looking much weaker than what the actual index will show Friday. Strike threats for the Los Angeles and Long Beach ports have been pushed off to 11:59 p.m. PST Friday.
Lean hog futures fell as much as $2.45 on the December contract with the deferred contracts down $0.875 to $2.125. This marks another new contract low for December hogs, trading as low as $54.225. This is the lowest price seen since September 2020. Pork cutouts were down 30 cents Thursday, and the Daily Direct Hog report was down 70 cents. Slaughter is currently 22,000 head above last week, so there will be little reason for packers to need to buy more this week.
| BULL SIDE | BEAR SIDE | ||
| 1) | Eastern Nebraska cattle traded to a Texas buyer, proving that the weakness in the North is not representative to the whole country. | 1) | Packers are buying for the first week of December, showing that the immediate excess supply may take weeks to work through. |
| 2) | Throughput is strong for packers, indicating they should continue buying higher volumes to work through the backlog of Northern cattle ready for slaughter. | 2) | Poor fat prices now look ugly for feedlots trying to buy feeders once their lots are empty. |
| 3) | Lean hog futures are still oversold. | 3) | The CME Lean Hog Index continues to fall with lower cash prices. |
| 4) | The pressure from the stock market Thursday can easily be recuperated with a stock market recovery. | 4) | Stock market pressure can really suppress prices as market confidence in the economy usually has a direct correlation to meat and protein demand. |
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