Tuesday Closing Livestock Market Summary - Live Cattle Futures Stabilize in Late-Day Trade

GENERAL COMMENTS

Cash cattle trade interest remains generally undeveloped with bids and asking prices still hard to pin down through cattle country. The overall lack of interest by packers may push active trade off until late in the week. There is a report that some cattle in the South are priced at $121 per cwt. Both asking prices and bids are expected to become more evident through the day Wednesday. According to the closing report, the national hog base is $1.30 higher compared with the Prior Day settlement ($50-$60) weighted average $57.92. The corn futures moved lower in light activity. December futures were 2 1/2 cents lower Tuesday. The Dow Jones Index is 255 points higher with the Nasdaq up 33 points.

LIVE CATTLE

Even though cattle futures closed lower, late-day buying helped to offset initial triple-digit losses as the market ended with slight-to-moderate pressure ($0.02 to $0.45 Lower). Position-squaring early in the session as traders tried to adjust positions following the early week gains helped to push prices sharply lower through most of the session. But overall lack of volume in the complex in the waning minutes of trade allowed prices to partially recover. Front-month December contracts moved nearly $1 per cwt above session lows and closed just 17 cents per cwt lower at $119.65 per cwt. Beef cut-outs: lower, $0.08 lower (select, $187.20) and down $0.94 (choice, $208.63) with light-to-moderate demand and moderate to heavy offerings (86 loads of choice cuts, 45 loads of select cuts, 9 loads of trimmings, 28 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL:

Steady to $2 higher. Trade interest remains sluggish going into midweek. With bids and asking prices generally hard to fully pin down, it is expected to be the tail end of the week before active trade develops. Packer interest will likely pick up Wednesday morning as the Fed Cattle Exchange Auction may also give more definition to trade direction through the morning Wednesday.

FEEDER CATTLE:

Light buying support trickled into the feeder cattle complex at the end of the session despite pressure through most of the day ($0.05 to $0.40 higher). Pressure in live cattle futures through most of the session left feeder cattle traders trying to catch up and look for additional market support while buyers seemed to be willing to stand on the sidelines focusing on a market pullback from Monday's gains. But late-day support stepped into all feeder cattle futures just before closing bell. Even though light pressure continues to develop in live cattle trade, the focus on firmness in feeder cattle markets is still the main support through the complex. CME cash feeder index for 11/27 is $156.75 up $1.49.

LEAN HOGS:

Moderate-to-strong buyer support returned to the market as buyers quickly focus on firming market tones ($0.10 to $1.42 higher). Triple-digit gains held in nearby contracts, which is helping to spark additional buyer support through the week as front-month futures have posted a $3-per-cwt rally over the last couple of weeks based on renewed commercial support quickly moving back into the market. This is not only adding support to futures markets, but also helping to stimulate buying in the cash hog and pork complex through the end of November. Carcass values shifted lower as all primals moved lower except for ribs and bellies, which posted gains over $2 per cwt. The sharp losses in picnics led the entire complex lower. Pork cut-out: $82.23 down $0.35. CME cash lean index for 11/24 $63.08, down $0.58. DTN Projected lean index for 11/27 $62.89 down $0.19.

WEDNESDAY'S CASH HOG CALL:

Mixed. Very little additional market direction is expected to be seen across the complex as packers seem to be able to easily find market-ready hogs to fill procurement schedules. The expectation that increased overall processing speeds will develop over the coming weeks is being countered by uncertainty of pushing the system even harder given the current hogs going through on a weekly basis. Wednesday's slaughter is expected at 465,000 head with an expected Saturday run at 251,000 head.

Tuesday Midday Livestock Market Summary - Cattle Futures Turn Lower Tuesday

GENERAL COMMENTS: 

Early pressure in cattle trade has added to the selling activity through the morning in both live cattle and feeder cattle futures. Lean hog futures remain firmly higher with triple-digit gains seen in nearby contracts. This mixed price movement is keeping trade volume moderate through the morning. Corn prices are lower in light trade. December corn futures are 2 cents per bushel lower. Stock markets are higher in light trade. The Dow Jones is 157 points higher while Nasdaq is up 16 points.

LIVE CATTLE:

Moderate to strong pressure is seen in the live cattle complex with spring 2018 contract holding triple-digit losses, although overall volume remains sluggish. This could limit further market activity through the trading session and most of the week. As of now, much of the pressure seen during early trade appears to be based on potential market moves in beef values. Cash cattle markets are quiet with bids and offers hard to pin down at this point. A few cattle have been priced at $121 in the South, but overall feeders continue to keep asking prices pretty concealed. Active trade is expected to be delayed until the last half of the week. Beef cut-outs at midday are mixed, $2.01 higher (select) and down $0.13 per cwt (choice) with activity movement of 91 total loads reported (42 loads of choice cuts, 22 loads of select cuts, 9 loads of trimmings, 18 loads of ground beef).

FEEDER CATTLE:

Light to moderate selling pressure is seen through the feeder cattle complex with traders focusing on additional market pressure in live cattle markets. This could spark even wider losses through the end of the session although trade volume remains sluggish. Prices are 60 to 70 cents lower although the pressure in live cattle markets could bring about additional late day losses through the complex. Trade seems to remain sluggish also, causing some concern that the inability to draw further buying back into the market may create a void in the market and add to the uncertainty through the end of the month.

LEAN HOGS:

Strong buyer support has moved back into the lean hog futures complex Tuesday morning following the ability to focus on the recent gains in futures trade and sustained follow-through support in cash hogs and pork values. Trade remains moderate at best although the underlying support is seen most aggressively in February and April futures which are holding triple digit gains. The expectation that increased buyer activity will continue to develop over the near future. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $1.47 at $58.09 per cwt with the range from $50.00 to $60.00 on 8,994 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price added $1.86 at $58.93 per cwt with the range from $55.00 to $60.00 on 4,725 head reported sold. The National Pork Plant Report posted 207 loads selling with carcass values gaining $0.58 per cwt. Lean hog index for 11/24 is at $63.08 down $0.58 with a projected two-day index of $62.89, down $0.19.

Tuesday Morning Livestock Market Summary - Cattle Futures Likely to Open on a Mixed Basis

GENERAL COMMENTS:

If should be a typically slow Tuesday in cattle country with neither bids nor asking prices well defined. Buying interest could start to take shape at midweek, but significant trade volume will probably be delayed until Thursday or Friday. Our guess is that asking prices will start out around $120 to $122 in the South and $192 to $195 in the North. Live and feeder futures should open on a mixed basis, linked to a combination of follow-through buying and long liquidation.

Hog buyers should resume work Tuesday with bids ranging from steady to $1 lower. Although slaughter got off to a slow start Monday, look for packers to push the pedal to the metal through the balance of the week. Lean futures seem staged to open moderately higher, boosted by residual buying interest and ideas of manageable fundamentals through the end of the year.

	BULL SIDE		BEAR SIDE
1)	Live and feeder futures closed sharply higher on Monday. Spot December live closed a little above the 40-day moving average, and more than 400 points above the 100-day moving average.	1)	The post-holiday beef trade got off on the wrong foot Monday. Significant losses in cutouts hardly suggested a strong recovery in red meat demand following the traditional white meat feast.
2)	Although new showlists distributed in feedlot country Monday were mixed (i.e., larger in Kansas and Colorado, smaller in Texas and Nebraska), the overall offering appears to be smaller than last week.	2)	For the week of Nov. 21, noncommercials aggressively reduced their net-long position in live cattle futures, down by 8,500 to a total of 130,000 contracts.
3)	The short-term trend in lean hog futures has turned positive. The long-term market trend is positive as well, as is the structure of the market.	3)	Despite Monday's pop in lean hog futures, prospects of large available hog supplies in the weeks ahead and questions whether pork demand will be adequate to clear the additional tonnage, continue to check late-year bullish enthusiasm.
4)	The seasonal index reflects a strengthening price pattern into the expiration of the December contract and the recent advance in December futures is confirming that tendency.	4)	For the week ending Nov. 21 noncommercial traders reduced their net-long position in lean hog futures by 5,400 contracts to 52,000.

OTHER MARKET SENSITIVE NEWS

CATTLE: (Maeil Business Newspaper) -- American beef that once had been shunned by Koreans over mad cow scare reclaimed the past glory of being responsible for more than half of imported beef that goes on Korean tables.

According to data from the Korea International Trade Association (KITA), U.S. beef imports during the January to October period this year amounted to $989 million, taking up 50.7 percent in the nation's imported beef market.

American beef took up more than 50 percent of the market for imports from 1993 to 2003 when its share in the local market hit an all-time high of 75.9 percent. In 2004, however, the share plummeted to 17.5 percent as the country banned the imports of U.S. beef in 2003 following mad cow disease outbreak in the U.S.

The country eased the ban from 2008 allowing in meat from cattle aged less than 30 months after holding several rounds of talks with the U.S. from 2006 to 2008.

The mad cow disease scare triggered a nation-wide protest in the early days of import resumption, but the market share of American beef has steadily increased since then. The gain is largely attributable to the free trade deal between Korea and the U.S. that took effect in 2012, according to market experts.

U.S. beef took up the largest share in the local imported beef market over the first 10 months of this year, after accounting for 37.4 percent in 2012, 42.2 percent in 2014 and 46.2 percent in 2016.

Meanwhile, the share of Australian brand fell to 43.6 percent during the same period, after reaching its peak of 78.8 percent in 2006.

HOGS: (GlobalMeatNews) -- Swine biology business Genesus Inc has acquired the French arm of Denmark-based Pork-Ex for an undisclosed sum.

Pork-Ex France is a small pig breeding company, employing 10 staff, based in the north-western city of Pacé, Brittany.

It was bought by Genesus to give the Canadian pig genetics outfit better access to the EU market, which is home to around 150 million pigs, according to Eurostat.

Genesus, based in Manitoba, Canada, is a pig breeder and genetics specialist and claims to have one of the largest pedigree pure-bred swine herds in the world.

Prior to the takeover, it had worked alongside Pork-Ex for over a year, collaborating on swine genetics in an attempt to make inroads into Europe's huge, albeit currently declining, pig industry.

During the year Genesus worked with Pork-Ex, it "became clear" that the business needed to launch a takeover of the firm's French subsidiary, Pork-Ex France, to secure "even better access" to Europe, Genesus said in a statement.

Monday Closing Livestock Market Update - Meat Futures Return From Holiday Thankful, Bullish

GENERAL COMMENTS

Activity in cattle feeding country Monday was limited to the distribution of new showlists. The late-month offering appears to be mixed, larger in Kansas and Colorado, but smaller in Texas and Nebraska. Overall, the post-holiday offering appears to be smaller than the previous week. According to the closing report, the national hog base is .44 lower ($50.00-58.00, weighted average $56.65). Corn futures closed 3 cents plus lower, hounded by the same negative forces addressed throughout the fall (i.e., large supplies and disappointedly slow exports). The stock market closed mixed with the Dow up 22 points and the Nasdaq off 10.

LIVE CATTLE

Live cattle futures returned from the holiday break with a clear sense of bullish mission. Closing prices spiked 95 to 160 points higher, powered by aggressive short coming and technical buying. Spot December managed to close above its 40-day moving average for the first time November 16. Beef cut-outs: significantly lower, off .57 (select: $187.28) to $1.42 (choice: $209.57) with light to moderate demand and offerings (50 loads of choice cuts, 23 loads of select cuts, 7 loads of trimmings, 12 loads of ground beef).

TUESDAY'S CASH CATTLE CALL:

Steady. Look for bids and asking prices to stay poorly defined with significant trade volume easily postponed until the second half of the week.

FEEDER CATTLE:

Feeders followed the bullish lead of the live market, closing 90 to 135 points higher. The March contract successfully closed above its 40-day moving average. Buying was also encouraged by lower corn prices and the premium status of the cash index. On an estimated run of 7,200 head (i.e., near unchanged from last week and 2016), Oklahoma City sold feeder steers and heifers steady to higher. Calves were marked mostly steady to $3 higher. CME cash feeder index: 11/24: 155.26, off .32.

LEAN HOGS:

Lean hog contracts extended the board's late November rally Monday, closing 30 to 127 higher. Pushing back over 64, spot December landed the best close seen since November 6. Carcass value closed moderately higher as stronger demand for butts and picnics overshadowed lower loin and rib sales. Pork cut-out: $82.58, up .26. CME cash lean index for 11/23: NA (DTN Projected lean index for 11/24: 63.08, off .58).

TUESDAY'S CASH HOG CALL:

Steady to $1 lower. The cash hog trade is expected to resume business in the morning with steady/weak bids.