Wednesday Midday Livestock Market Summary - Mixed Trade

GENERAL COMMENTS:

Limited overall activity in the livestock market is seen Wednesday morning as traders are still in the middle of the holiday week and on one hand are recovering from the Christmas break, while on the other hand, preparing for New Year's and end of the year positioning.

Overall market participation remains sluggish in all markets, which in many cases leads to some market stability. But the overall lack of active volume in the market can also spark market swings based on a small percentage of normal trade activity in the market on a daily basis. Feeder cattle futures have continued to post moderate gains as traders look for potential firmness in 2024, while the rest of the livestock market is mixed to mostly lower at midday.

March corn is down 4 1/2 at $4.758 and March soybean meal is down $2.90 at $393.00. The Dow Jones Industrial Average is up 64.06 at 37,609.39.

LIVE CATTLE:

Live cattle futures have steadily backed away from early-week gains with mixed trade through most of the morning leading to moderate to firm losses at midday. February contracts continue to be the most actively traded contract in the complex, and is currently leading the market lower with losses over $1 per cwt. The rest of the market is holding moderate to firm losses as light trade through the holiday week is likely to limit renewed buyer support at this point.

December contracts are essentially dead in the water as limited open interest in this contract is dwindling fast with these contracts moving toward expiration quickly. The overall lack of volume in the market could allow for price shifts to continue to be seen through the rest of the session, but it is likely that the technical softness seen during the morning will continue through closing bell as traders adjust positions following Tuesday's active gains.

Cash cattle markets remain generally quiet, although a few bids are seen in Nebraska at $270 per cwt dressed basis. Asking prices are not readily available at this point, but for the time being there is little to no interest in current bids. It is likely that active trade will be delayed another day, and possibly until Friday.

December live cattle are $0.15 lower at $170.425, February live cattle are $1.30 lower at $169.1, April live cattle are $0.75 lower at $172.70. 

Boxed beef prices are mixed: choice down $1.72 ($291.59) and select up $0.13 ($261.32) with a movement of 58.81 loads (35.50 loads of choice, 11.96 loads of select, zero loads of trim and 11.35 loads of ground beef).

FEEDER CATTLE:

Feeder cattle have posted firm follow through buyer support Wednesday morning. The continued movement higher is sparked by limited but supportive technical support trickling into the lightly traded feeder cattle complex. Following ample time to digest last week's cattle on feed and placement reports, the ability to limit fundamental pressure on the feeder cattle complex seems to be easing.

Although it is unlikely that significant short-term changes will quickly develop in any cattle market at this point, the strong market pressure seen over the last three months seems to be softening, giving way to renewed hope of a market recovery through the next year. It is also important to remember that limited trade volume is seen during the holiday week, creating some additional caution to the underlying support seen across the feeder cattle trade over the last couple of days.

January feeders are $0.75 higher at $224.30, March feeders are $0.80 higher at $225.375 and April feeders are $0.68 higher at $230.75.

LEAN HOGS:

Lean hog futures have continued to work lower through the morning, although limited buyer support has seen glimpses as mixed trade has been scattered through the complex at different times through the morning. Narrow gains in spot contracts at midday is an example of this. The rest of the complex remains under light to moderate pressure with prices generally 30 to 50 cents lower at midday. Firm losses Tuesday reiterated traders' disappointment to the news that hog numbers continue to remain stable with last year and have not yet started to decrease. This is likely to continue to impact nearby contract months the most, as overall breeding herd replacements are starting to show a slight decline, but it is uncertain if this will be enough to make a significant change in overall hog numbers and pork supply levels through much of 2024.

February lean hogs closed steady, April lean hogs are $0.55 lower at $75.525 and May lean hogs are $0.33 lower at $82.475. Hog Prices are lower on the Daily Direct Morning Hog report, down $1.90 with a weighted average of $46.19, ranging from $40.00 to $48.00 on 4,420 head with a five-day rolling average of $46.19. Pork Cutouts totaled 159.42 loads with 137.86 loads of pork cuts and 21.56 loads of trim. Pork cutout values are up $1.29 at $81.87.

Wednesday Morning Livestock Market Update - Hogs May See Further Weakness

GENERAL COMMENTS:

Traders had the Cattle on Feed report already factored in, resulting in futures moving to positive prices and closing higher. Gains were moderate, with traders looking ahead to what the cash market will do. This is the first time futures did not fall apart after the report as they did the previous three Cattle on Feed reports. This may provide more confidence for traders to buy into the market for a price retracement. Deferred feeder cattle contracts posted strong gains in anticipation of tighter supplies and higher prices during the second half of the year. Boxed beef closed higher Tuesday with choice up $0.83 and select up $0.04. There has been no cash activity so far and cash trade may follow a similar pattern to last week with activity delayed until late in the week. Feedlots will hold for higher prices as they scored a victory last week and will look for the same, even though it is a holiday week.

Hogs struggled the entire day trading the slightly bearish overall numbers on the Hogs & Pigs report. The pressure pushed futures below technical support, where they closed setting a negative tone for Wednesday. Cash was lower with the National Daily Direct Afternoon Hog report down $1.21 with a weighted average of $46.55. Hogs are struggling to find support. Cutouts showed a minor decline of $0.09. Cutouts are expected to increase as retailers replenish their meat cases. Hog slaughter will be reduced again this week as the upcoming holiday weekend will disrupt schedules.

	BULL SIDE		BEAR SIDE
1)	The Cattle on Feed report had already been factored in with traders looking ahead to cash trade and the potential for better demand.	1)	Beef demand needs to improve before solid support returns to the cattle complex.
2)	Cattle supplies are expected to remain tight throughout much of next year, which should support the overall market.	2)	Packers may not be too anxious this week to purchase cattle aggressively. Slaughter demand is reduced, and packers may pay no more than steady money.
3)	Hog futures may have adjusted to the Hogs & Pigs report, which may limit further downside price movement.	3)	Hog futures closing below technical support may keep further pressure on the market Wednesday as further liquidation may continue.
4)	Deferred hog futures showed minor losses as the report showed a lower number of hogs kept for breeding, which may result in reduced hog numbers later in 2024.	4)	Reduced slaughter again this week may leave packers less aggressive, putting further pressure on cash hog prices.

Tuesday Closing Livestock Market Update - Post-Christmas Support Pushes Cattle Futures Higher

GENERAL COMMENTS:

Limited trade activity is expected through most of the week between the Christmas and New Year's holidays. But that did not stop buyers from stepping back into the cattle complex despite the morning price pressure following the Cattle on Feed report last week. Strong triple-digit gains developed in most live cattle futures and deferred feeder cattle contracts in the last two hours of trade. Hog futures moved in the opposite direction as the cattle market during the Tuesday trading session with strong losses seen in spring 2024 contract months with the concern that still strong supply levels will continue to be a drag on the market and limit overall demand growth through the first half of 2024. Hog prices closed lower on the Daily Direct Afternoon hog report, down $1.21 with a weighted average of $46.55 on 4,640 hogs. March corn closed up 7 1/4 at $4.803 and March soybean meal closed up $4.80 at $395.9. The Dow Jones Industrial Average is up 159.36 at 37,545.33.

LIVE CATTLE:

Live cattle futures traded higher through most of the session, despite initial price uncertainty following the holiday weekend. The overall take of the higher-than-expected cattle on feed numbers in our nation's feedlots was that any bearishness in the market had been factored into market prices over the past couple of weeks, and the outlook for slowing feed numbers in the months to come may help to add even more support to the live cattle complex. By the end of the session actively traded nearby contracts were more than $1 per cwt higher, adding potential support for follow-through gains during the week. Overall volume and market activity is expected to remain extremely light through the entire week, which could add even more volatility to market prices over the next few days, but with prices near support levels, there is more upside market potential than down. Cash cattle trade remains quiet with bids and asking prices undeveloped during the afternoon. Showlists appear mixed, lower in Texas, steady in Kansas, and higher in Nebraska and Colorado. It very well could be late in the week before active cash trade develops. The 5-area weekly average price last week increased $2.14 per cwt from the previous week to $170.85. This move higher ahead of the Christmas holiday is expected to help bring some additional support to this week's cash market direction. December live cattle closed $0.53 higher at $170.575, February live cattle closed $1.88 higher at $170.4 and April live cattle closed $1.33 higher at $173.45. 

Tuesday's slaughter is estimated at 100,000 head -- 25,000 head less than a week ago and 22,000 head less than a year ago. 

Boxed beef prices closed higher: choice up $0.38 ($293.31) and select up $0.04 ($261.19) with a movement of 68.54 loads (42.38 loads of choice, 13.19 loads of select, 7.36 loads of trim and 5.61 loads of ground beef).

WEDNESDAY'S CATTLE CALL: Steady to $1 Higher. Both sides remain quiet following Tuesday, with expectations that sluggish activity will develop through midweek. It very well could be late in the week before active trade develops.

FEEDER CATTLE:

Feeder cattle futures started out under light to moderate pressure Tuesday morning as traders took into account the larger-than-expected placement levels in Friday's Cattle on Feed report. But this market weakness slowly eroded near midday as renewed buyer support and growing support in live cattle futures trade helped rekindle buyer activity. The focus on long-term market direction pushed the most active price gains into late 2024 contract markets, but left all contracts moving in a positive direction through the end of the trading session. Holiday schedules are expected to keep trade volume reduced through most of the week, which could very well add even more volatility to the entire feeder cattle complex. January feeders closed $0.80 higher at $223.55, March feeders closed $0.18 higher at $224.575 and April feeders closed $0.55 higher at $230.075. The CME Feeder Cattle Index for Dec. 21: up $1.22, $221.03.

LEAN HOGS:

Lean hog futures tumbled lower Tuesday as traders continue to be plagued by underlying fundamental support and news that the hog herd has not contracted as expected over the past few months. Even though only narrow reductions were expected in hog numbers in last Friday's Hogs and Pigs report, the fact that overall numbers were slightly higher than year ago levels has impacted market prices and the general direction of the hog complex. February futures led the market lower with a $2.05 per cwt loss, based on the expected number of market-ready hogs in the near future and lack of short-term demand growth. Deferred futures posted much more subdued losses, based on the expectation that breeding herds will be reduced. February lean hogs closed $2.05 lower at $69.3, April lean hogs closed $1.50 lower at $76.075 and May lean hogs closed $1.15 lower at $82.80. Tuesday's hog slaughter is estimated at 463,000 head -- 14,000 head less than a week ago and 16,000 head less than a year ago. Pork Cutouts totaled 298.09 loads with 264.30 loads of pork cuts and 33.79 loads of trim. Pork cutout values are down $0.09 at $82.12. The CME Lean Hog Index for December 21: down $0.44, $66.25.

WEDNESDAY'S HOG CALL: Steady to $1 lower. Continued pressure in futures as well as softness in cash values are likely to limit price gains at midweek. With weekly procurement schedules limited by not only Christmas holiday schedules, but dark plants next Monday due to New Year's Day, limited buying is expected to be needed.

Tuesday Midday Livestock Market Update - Cattle Futures Shift Higher

GENERAL COMMENTS:

Following the long holiday weekend break and last Friday's report frensy for both cattle and hog markets, traders are looking at mixed market direction early in the week. Initial morning trade posted moderate to firm pressure as traders viewed last week's cattle on feed and hogs and pigs reports neutral to slightly bearish, but the underlying softness in the cattle market was overseen by light to moderate buying with the focus that most of this pressure was already factored into market prices last week.

Hog futures have continued to show market weakness through the morning with the most aggressive pressure seen in February and April contracts, trading $1 to $2 per cwt lower through morning trade. Light volume is seen following the Christmas break, and this is expected to continue through the rest of the week with limited market activity typically seen between the Christmas and New Year's holiday each year.

March corn is up 5 1/4 at $4.783 and March soybean meal is up $0.50 at $391.6. The Dow Jones Industrial Average is up 125.12 at 37,511.09.

LIVE CATTLE:

Live cattle futures have led the cattle market higher Tuesday morning following the three-day weekend. February futures are posting the most significant gains at midday or $1.12 per cwt, while the underlying support through the complex remains generally firm despite the limited trade activity. Limited trade direction changes were seen following last Friday's cattle on feed report, which posted overall cattle on feed numbers in December slightly above pre-reported estimates. But the overall market shifts seen last week seemed to have adequately adjusted for these increases, allowing traders to once again focus on the potential of growing demand support through the first two quarters of 2024.

Light volume is expected to be seen through the entire week, which always has the opportunity to bring about moderate to wide price swings with very little fundamental justification. But the ability to create market stability and light to moderate price gains through the end of the year should help bring about additional buyer interest into the entire complex.

Cash cattle activity remains quiet Tuesday morning as packers and feeders have a late start to the week due to the Christmas holiday. The cash price support seen last week should help to bolster asking prices, but it is likely that any significant interest may not be seen until midweek or later.

December live cattle are $0.25 higher at $170.3, February live cattle are $1.13 higher at $169.65, April live cattle are $0.93 higher at $173.05. 

Boxed beef prices are lower: choice down $0.48 ($292.45) and select down $0.45 ($260.70) with a movement of 36.32 loads (21.62 loads of choice, 6.74 loads of select, 4.10 loads of trim and 3.86 loads of ground beef).

FEEDER CATTLE:

Feeder cattle trade started out under pressure Tuesday morning as the lightly traded feeder cattle complex took the brunt of the cattle on feed report news and held light to moderate price pressure through much of the morning. At midday, the softness in the complex has been shaken off with most contracts holding light to moderate gains. Even though placement numbers slid from previous month and year ago levels, the totals still came in higher than expected, which created some uncertainty about current and future supply levels available for the market through the last half of 2024.

Prices may continue to wander in a narrow to moderate range through the rest of the session, with limited trade volume likely to add volatility to the market not only Tuesday, but the rest of the week.

January feeders are $0.28 higher at $223.025, March feeders are $0.25 lower at $224.15 and April feeders are $0.13 higher at $229.65.

LEAN HOGS:

Lean hog futures have moved lower Tuesday morning following the long weekend break and Friday's quarterly hogs and pigs report. Total hog numbers are fractionally changed from year-ago levels, but slightly above pre-report estimates. The expectation by the market that the hog herd has contracted more than it has over the last three months is adding even more concern to market prices, and may limit additional buyer support across the entire complex.

February and April futures are showing the most aggressive pressure, falling $1 to $2 per cwt as traders try to adjust to the current supply levels combined with lackluster growth support in demand and pork prices through the end of the year.

February lean hogs are $2.10 lower at $69.25, April lean hogs are $1.48 lower at $76.1 and May lean hogs are $1.15 lower at $82.80. Hog Prices are unreported due to confidentiality on the Daily Direct Morning Hog report. Pork Cutouts totaled 113.52 loads with 103.22 loads of pork cuts and 10.30 loads of trim. Pork cutout values are down $0.07 at $80.58.