Friday Morning Livestock Market Update - Sluggish Market Movement Expected Following Thanksgiving Break

 General Comments:

Limited cash cattle trade developed as of late Wednesday with prices generally steady to $1 per cwt higher from week ago levels. It appears that packers will need to secure at least additional light trade before the end of the week in order to put themselves in a good position over the next couple of weeks as they secure current procurement schedules going into the month of December. But the activity level on Friday after Thanksgiving is always uncertain as to just how much interest either side will have to move back into the market. Cash cattle trade seen Wednesday was listed at $109 to $111 live (mostly $110 to $111) and $171 to $174 dressed (mostly $172 and higher). The combination of elevated boxed beef values through the week combined with active support in live cattle futures is expected to help support underlying cash trade moving into the weekend despite quiet markets. Futures trade is likely to remain sluggish as most traders are either still out for the holiday or remain on the sidelines as they have already adjusted positions until more active volume moves back into the complex. This should keep price moves uneventful. But the concern with these holiday schedule trading sessions is that volatile market swings can easily develop due to the limited activity.

Lean hog futures have rallied higher in the last week with spot February futures holding above $67 per cwt. This is a $4 per cwt rally from setting fall lows last week and is in a position to test November highs of $68.47 per cwt before the end of the month. Trade Friday is expected to remain subdued due to limited trade and a shortened trading session. Without any unforeseen market shifts, lean hog trade could wander within a narrow trading range during the entire day. Most traders are expected to wait until next week before adjusting to technical of fundamental market shifts, which could help support the recent market shifts through nearby and deferred contracts. Cash hog prices are expected $1 lower to $1 higher with most bids expected steady 50 cents lower. Slaughter Friday is expected at 478,000 head. Saturday runs are expected at 379,000 head.

	BULL SIDE		BEAR SIDE
1)	Firming cash cattle markets were seen late Wednesday before the holiday break, with additional potential gains developing Friday as packers are expected to need at least some additional trade going into next week.	1)	Extremely limited holiday trade volume may hinder futures and cash market trade Friday with most traders absent from the market Friday and futures markets trading on a shortened schedule.
2)	Active gains in feeder cattle futures continue to spark positive momentum in the complex. January feeder cattle futures have rallied $6 per cwt over the last week, putting trade in a position to test short-term resistance levels of $140.72 per cwt before the end of the week.	2)	Light holiday volume always creates the risk of wide, unusual market swings which have little fundamental or technical merit but based solely on the lack of volume in the market and potential to manipulate market prices based on lack of activity.
3)	Firm gains have redeveloped in pork cutout values heading into the weekend. This is helping to drive additional buyer support into nearby lean hog contracts in late November.	3)	Pork packers continue to have aggressive expectations for Friday and Saturday processing schedules. These numbers are needed to keep the market current and make up for remaining dark on Thursday. But in order to sustain these elevated holiday schedules depends on active employee participation through the entire weekend. If employee numbers are reduced, plant speeds will significantly suffer for the week.
4)	A move above $67.67 per cwt in spot February futures would break through resistance levels, likely sparking additional technical buyer support through the end of the year.	4)	With nearby lean hog futures surging over $4 per cwt over the last week, the lean hog complex is ripe for a moderate price correction. The limited trade volume Friday could bring about pressure in nearby and deferred contracts with little underlying direction from fundamental market factors.

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Wednesday Closing Livestock Market Summary - Contracts Rally with Thanksgiving Spirit

 GENERAL COMMENTS:

It's been a phenomenal week for both the cattle contracts and lean hog market. Both markets have seen follow-through trader support and are heading into Friday's trade fully higher. Potentially the most interesting market to watch is how feedlots navigate this week's cash cattle trade. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.50 with a weighted average of $57.39 on 4,890 head. March corn is down 5 cents per bushel and January soybean meal is down $1.00. The Dow Jones Industrial Average is down 177.25 points and NASDAQ is up 54.38 points.

Markets are closed Thursday for the Thanksgiving holiday and will close early on Friday.

LIVE CATTLE:

For the most part, feeders have stuck to their guns are really pushing for higher prices. There has been some cash cattle trade, but thus far it's been a light movement at steady to $1.00 higher than a week ago. The futures market has really supported cash sellers and higher boxed beef prices will keep packers encouraged to keep buying and processing. December live cattle closed $0.20 higher at $111.37, February live cattle closed $0.22 higher at $114.17 and April live cattle closed $0.27 higher at $117.42.

Wednesday's slaughter is estimated at 118,000 head, 1,000 head less than a week ago and year ago.

Boxed beef prices closed higher: choice up $0.76 ($245.06) and select up $1.19 ($220.90) with a movement of 116 loads (75.79 loads of choice, 18.62 loads of select, 8.20 loads of trim and 13.61 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Higher. This week has aligned perfectly for feedlots to add to the cash cattle market as boxed beef prices scale higher and the futures market shows ample support. Achieving $113 by the end of the week isn't out of the question if feedlots don't weaken late Wednesday evening and continue to rally together.

FEEDER CATTLE:

Feeder cattle contracts closed higher with the most trader support seen in nearby contracts. January feeders closed $1.57 higher at $140.17, March feeders closed $1.15 higher at $139.27 and April feeders closed $1.05 higher at $140.40. The market has not only been supported by traders this week, but also by the corn market's regression, which closed mostly $0.05 lower in nearby contracts. The rest of the week will be quiet, but next week's trade should see more action again. At Ozarks Regional Stockyards in West Plains, Missouri, compared to a week ago, steer and heifer calves traded mostly steady with some seven-weight steers trading as much as $5.00 higher. Demand was seen across the marketplace with a lighter run tested on all weights. Next week is expected to be a larger scale as producers try to market their calves in-between the Thanksgiving and Christmas holiday. The CME feeder cattle index for Nov. 24: up $0.18, $137.30.

LEAN HOGS:

The lean hog market was able to keep the day's support through closing. December lean hogs closed $0.87 higher at $66.17, February lean hogs closed $0.92 higher at $67.67 and April lean hogs closed $0.52 higher at $70.75. Given that it's a holiday week and that the lean hog market lacks substantial support to move out of its sideways trend, the market enjoyed the light trader interest that it has received this past week.

Pork cutouts totaled 396.71 loads with 356.23 loads of pork cuts and 40.48 loads of trim. Pork cutout values: up $0.77, $78.35. Wednesday's slaughter is estimated at 494,000 head, steady with a week ago and 15,000 head more than a year ago. The CME lean hog index for Nov. 23: down $0.13, $67.70.

FRIDAY'S CASH HOG CALL: Lower. The week will most likely taper out on a softer note as it's a shortened week and packers don't have to worry about getting hogs bought as there's ample supply.

#completeherdhealth

Wednesday Midday Livestock Market Summary - Contracts Continue to Find Trader Support

 GENERAL COMMENTS:

Traders continue to invest in all three livestock futures markets, sending them higher into Wednesday afternoon. Cash cattle trade is starting to develop at steady to $1.00 higher than last week, but at minimal levels and certainly not enough cattle have sold to say the week's trend is established. March corn is down 3 3/4 cents per bushel and January soybean meal is down $1.90. The Dow Jones Industrial Average is down 189.55 points and NASDAQ is up 28.28 points.

LIVE CATTLE:

For the most part, the live cattle market is trading mildly higher as traders eye the feeder cattle contracts more as we head into Wednesday afternoon trade. December live cattle are up $0.22 at $111.40, February live cattle are down $0.05 at $113.90 and April live cattle are up $0.05 at $117.20. Feeders are seeing more interest from packers as the day progresses and packers have upped their bids already Wednesday morning. There's been a light movement of cattle at steady to $1.00 higher than a week ago, but not enough trade has developed to call the week's trend established. If feedlots can stick together and push trade into Friday, more money could be found for this week's trade. Iowa sold some cattle for $110 and $172; Nebraska is seeing bids offered at $111 and $174; and Kansas has bids offered at $111.

Boxed beef prices are higher: choice up $0.62 ($244.92) and select up $1.40 ($221.11) with a movement of 79 loads (50.97 loads of choice, 13.17 loads of select, 5.33 loads of trim and 9.42 loads of ground beef).

FEEDER CATTLE:

Feeders are thankful to see another day of lower corn prices and continued follow-through support from traders leading to higher prices. January feeders are up $1.22 at $139.75, March feeders are up $0.82 at $138.95 and April feeders are up $0.72 at $140.07. It's a touch-and-go week for feeder cattle sales as some barns canceled their sales for the holiday, some barns are seeing phenomenal demand still, and some are noticing fewer buyers as many take the later part of the week off to spend time with family. Regardless, if the week can continue to add positioning to the marketplace and sees continued support from the board, next week's market could be sitting in a fine position to sell feeders strong once again.

LEAN HOGS:

The lean hog market again is seeing moderate support from traders who are willing to lightly invest in the hog complex without getting too bold and pushing the market out of its current sideways trend. December lean hogs are up $0.42 at $65.72, February lean hogs are up $0.57 at $67.32 and April lean hogs are up $0.32 at $70.55. Without there being strong demand from packers, and mixed signals coming from cutout values, the market will most likely continue to trade steady through the week.

The projected lean hog index for 11/23/2020 is down $0.13 at $67.70 and the actual index for 11/20/2020 is down $0.31 at $67.83. Hog prices are lower on the National Direct Morning Hog Report, down $0.41 with a weighted average of $57.48, ranging from $57.00 to $58.50 on 3,840 head and a five-day rolling average of $57.94. Pork cutouts total 178.31 loads with 153.92 loads of pork cuts and 24.39 loads of trim. Pork cutout values: up $0.56, $78.14.

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Wednesday Morning Livestock Market Update - Holiday Week Bullishness Builds Across Cattle Complex

 General Comments:

Cash cattle trade remains quiet heading into Wednesday morning with most of cattle country unable to post reported cash cattle trade. A few sales were reported in Iowa Tuesday afternoon at $172 per cwt, but this is still not enough activity to establish a market trend. The continued surge in futures trade and boxed beef values during the week is helping to create expectations from feeders for higher cash cattle trade by the end of the week, even if they need to restart cash trade negotiations following the Thursday holiday break. As typically seen during a holiday week, the desire by both sides is to wrap up business before the break, but both sides are not beyond waiting until after Thanksgiving if they feel it will advance their respective position. The uncertainty in the market is based partly on unclear amounts of cattle packers "needs" to purchase going into early December. Although the currently active plant speeds will continue to stimulate active cattle movement, the amount of early December contracts being called and late year holiday schedules may limit the amount of short-term buying needed in order to fuel current plant speeds. Futures trade has continued to gain momentum through the week, although prices in live cattle and feeder cattle futures have fallen away from previous highs at closing bell. It is still too early to determine if the market is starting to cool, or traders are regrouping in order to position for further gains before the holiday break. Trade volume is expected to remain light once again. Outside market direction is likely to be a major factor in the overall movement and direction of cattle trade during the pre-holiday session. CME trading hours will remain normal Wednesday with markets closed Thursday and an early close on Friday.

Lean hog futures seem to be struggling to take the next step higher despite widespread gains seen through the rest of livestock trade and outside markets. The Dow Jones Index closed above 30,000 points for the first time in history Tuesday, and crude oil prices have continued to surge higher. The inability to spark widespread follow-through gains in lean hog futures is partially focused on the uncertainty of how much more support can be built in pork demand short term even if the economy rebounds. Concerns about growing production levels and falling pork prices in China has created increased uncertainty about future export sales levels to the country, which would be a significant hit to the entire port industry. The firmness in cattle markets is still a bullish factor for the lean hog market, as increased domestic demand will likely spark further product demand. But hog production is not slowing down significantly, limiting the expectation of tighter supplies in the coming months, no matter how active pork demand becomes. This could keep prices hovering in the current trading range in the near future, and possibly the end of the year. Cash hog prices are expected $1 lower to $1 higher with most bids expected steady 50 cents lower. Slaughter Wednesday is expected at 482,000 head. Saturday runs are expected at 385,000 head.

	BULL SIDE		BEAR SIDE
1)	Underlying optimism in the economy continues to be a major factor in sparking renewed cattle market support. The Dow Jones Index broke through the 30,000-point ceiling Tuesday, creating new highs that is likely to spread to cattle market optimism.	1)	Despite the active gains in futures and beef values, cash cattle trade has been hesitant to shift higher during the week. The lack of firm gains over the next couple of days could limit underlying market optimism in the entire cattle complex.
2)	Boxed beef values continue to show no sign of letting up as aggressive buying support is seen in choice and select markets. The underlying support of higher beef values is signaling widespread optimism across the entire complex.	2)	Limited trade during the week could limit consistent trader interest, allowing for traders to quickly being distracted by other outside markets or news stories. This may lead to late week price shifts.
3)	Outside market support seen during the week continues to be a strong indicator for increased consumer buying. This is expected in pork markets over the coming weeks.	3)	Light trade volume is likely the rest of the week. Although the expectation that current market support may hold, there is potential for wide-ranging price shifts to develop due to the limited traders in the market.
4)	Firm underlying gains on Tuesday in deferred lean hog futures points to a more steady market growth as traders continue to balance demand growth with current supply levels. Summer 2021 contracts are holding $15 per cwt premiums to current price levels, pointing to further market support over the coming months.	4)	Fundamental pressure in cash and pork cutout values during the week has created growing concerns that technical support may be limited following the Thanksgiving holiday. This could cause further market retractions over the coming days and weeks.

#completecalfcare