Wednesday Midday Livestock Market Summary - Hog Futures Post Additional Losses

GENERAL COMMENTS:

Lean hog futures have moved lower in each of the past three trading sessions as traders are slowly but steadily backing away from short-term highs set last week. The lack of aggressive market swings in cattle trade through the last couple of days has put more emphasis on market fundamentals in all segments of the livestock complex, also creating concern that pork demand may continue to struggle through the holidays.

Moderate losses are holding in lean hog trade, although cattle futures are mixed in a moderate range. Very little sense of direction is developing in cattle futures during morning trade, but it will be interesting to see if prices fade from current levels in the last couple hours of trade like seen over the past few trading sessions.

March corn is down 2 3/4 at $4.7 and January soybean meal is down $4.20 at $399.00. The Dow Jones Industrial Average is up 70.39 at 37,628.31.

LIVE CATTLE:

Live cattle markets remain generally quiet in mixed price direction through the morning Wednesday. The pullback in price levels seen Tuesday and general lack of support in the market heading into the Christmas holiday is keeping many traders on the sidelines. Nearby December and February futures are still able to hang onto early gains, but the rest of the complex has eroded lower through Wednesday morning. The focus on lack of long-term activity over the next several days and uncertainty of the upcoming cattle on feed report Friday will likely keep prices hovering within a narrow to moderate range unless some additional significant market news develops.

Cash cattle markets are still generally quiet, although a few bids have developed through the morning across the North. Live bids of $186 to $170 and Dressed bids of $270 per cwt are available. At this point, asking prices are still very quiet and hard to pin down, but it is likely that feeders are looking for steady to higher money this early in the week, and without that will gladly hold out until Thursday or Friday. Late-day trade Tuesday in the North at $169 live and $270 dressed was light enough that an accurate trend is still unable to pin down.

December live cattle are $0.48 higher at $168.925, February live cattle are $0.18 higher at $168.95, April live cattle are $0.10 lower at $172.575. 

Boxed beef prices are lower: choice down $0.25 ($288.58) and select down $1.74 ($261.42) with a movement of 71.74 loads (39.79 loads of choice, 10.54 loads of select, 4.56 loads of trim and 16.85 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures traded higher through most of Wednesday morning, but at midday prices are starting to slowly erode. This same trend has developed each day this week with early gains developing throughout the morning, only for a portion, if not all of the support given away by the end of the trading session.

The overall light activity seen across the entire cattle complex, and especially in the feeder cattle market is limiting trade activity. Although traders are anticipating Friday's Cattle on Feed report, the overall volume in the market through the rest of the year is expected to remain generally sluggish with traders focusing on the upcoming holidays.

January feeders are $0.15 lower at $221.75, March feeders are $0.18 higher at $223.375 and April feeders are $0.50 higher at $228.375.

LEAN HOGS:

Moderate pressure is holding in lean hog futures trade at midday following weaker market shifts all morning. April through August contracts are holding losses of 70 cents to $1 per cwt at midday surrounding questions of significant shifts in production through the next few months.

Current strong pork production levels in China is still viewed as a concern, as this may limit overall export demand and the ability to actively move U.S. pork supplies at a premium through much of 2024. Even with the recent price softness, prices are still well contained in the recent market ranges, with very little technical damage being done to price charts with the current market shifts.

February lean hogs are $0.53 lower at $70.025, April lean hogs are $0.75 lower at $76.85 and May lean hogs are $1.03 lower at $83.325. Hog Prices are lower on the Daily Direct Morning Hog report, down $2.20 with a weighted average of $48.09, ranging from $41.00 to $49.00 on 1,992 head with a five-day rolling average of $49.11. Pork Cutouts totaled 182.27 loads with 162.92 loads of pork cuts and 19.35 loads of trim. Pork cutout values are down $4.32 at $81.22.

Wednesday Morning Livestock Market Update - Traders Look Ahead to Two Major Reports

GENERAL COMMENTS:

Traders are looking ahead to the rest of the week with caution. They await cash trade to see whether it may provide at least steady cash and they are looking ahead to the Cattle on Feed report Friday. Generally, we may see more positioning of traders beginning about a day or two ahead of the report, but due to Christmas and some thoughts already turned toward travel and the holidays, trader positioning may be more prominent Wednesday. On-feed numbers as of Dec. 1 are estimated at 102.2%. Placements in November are estimated at 95.9% with marketings at 93.3%. Cash trade was quiet Tuesday with packers and feedlots waiting for each other to tip their hand. Boxed beef was lower with choice down $0.10 and select down $0.56.

Hog futures opened lower and tried to move back into positive territory but failed. As with cattle, traders may begin to position ahead of the Hogs and Pigs report to be released Friday. There is always more anxiousness when major reports are released ahead of the three-day weekend. Cash continues to perform poorly with the National Direct Afternoon Hog report down $1.42 with a weighted average of $46.97. Cutouts declined 0.91. This combination may put further pressure on futures Wednesday. In the Global Agritrends monthly Newsletter it is reported that China's swineherd is in one of the most prolonged financial downturns in history with farmers losing money 20 of the past 24 months. Losses last week were reported at US$50 per head. This may spur liquidation in the country.

	BULL SIDE		BEAR SIDE
1)	Packers may want to accomplish business earlier in the week rather than wait until the end of the week to purchase ahead of Christmas. They may be more aggressive in their buying.	1)	Packers may not be willing to step up this week as their needs for cattle may not be as great over the next two weeks due to the reduction of slaughter.
2)	Chart gaps were closed Tuesday with the recent uptrend still intact. This may provide technical support.	2)	Traders will be cautious ahead of the Cattle on Feed report, which may leave the market drifting.
3)	Smithfield has partially completed a planned sow herd liquidation that could top 90,000 head, according the Global Agritrends Newsletter.	3)	The weakness of cash and cutouts Tuesday may have a negative influence on the trading activity today, eliminating some of the recent gains.
4)	The Hogs and Pigs report could show further herd liquidation, which should eventually support the market.	4)	Packers may not be very aggressive the rest of the week as slaughter needs will be reduced during the holiday period.

Tuesday Closing Livestock Market Update - Futures Faded Quickly in Late-Day Trade

GENERAL COMMENTS:

Cattle futures quickly pulled back from strong gains seen over the last week, but most of the market pressure was confined to the last hour of trade. January feeder cattle futures led the complex lower with $1 per cwt losses at closing bell, but the uncertainty of Friday's cattle on feed report and upcoming limited holiday trade is starting to cast a nervous tone across the entire cattle complex.

Hog futures posted moderate losses through most of the session as trades continue to focus on lack of significant changes in short-term production levels and questions about demand growth in early 2024. Hog prices closed lower on the Daily Direct Afternoon hog report, down $1.42 with a weighted average of $46.97 on 3,717 hogs.

March corn closed down 4 1/4 at $4.728 and January soybean meal closed down $9.60 at $403.2. The Dow Jones Industrial Average is up 251.90 at 37,557.92.

LIVE CATTLE:

Live cattle futures shifted lower in late-day trade Tuesday. The trend of live cattle markets over the past couple of trading sessions is to move firmly higher early in the session and walk back a portion, if not all of these early gains as the trading day continues.

With limited amount of buyer interest in the pre-holiday market, and very little fundamental changes seen during each trading session, it is likely that moderate daily price shifts may develop through the upcoming days and weeks. Trade volume is only expected to slow from now until the end of the year due to holiday trade.

Early estimates for Friday's Cattle on Feed report are being released with average estimates of 102.2% year-ago levels. This could generally curb overall market support, but the narrow range seems that most analysts are generally confident by this projection.

Cash cattle activity remains quiet Tuesday afternoon with bids and asking prices still limited. It very well could be the last half of the week before any active trade develops. December live cattle closed $0.38 lower at $168.45,

February live cattle closed $0.85 lower at $168.775 and April live cattle closed $0.83 lower at $172.675. 

Tuesday's slaughter is estimated at 124,000 head, 3,000 head less than a week ago and unchanged from a year ago. 

Boxed beef prices closed lower: choice down $0.10 ($288.83) and select down $0.56 ($263.16) with a movement of 134.75 loads (76.31 loads of choice, 25.29 loads of select, 11.12 loads of trim and 22.03 loads of ground beef).

WEDNESDAY'S CATTLE CALL: Steady. Limited interest is seen Tuesday, which could further delay any activity in the market. With Friday's report being closely watched, possible trade could be pushed off until late in the week.

FEEDER CATTLE:

Feeder cattle futures led the market lower Tuesday as late day pressure developed in all contract months. Even though firm buyer support was seen early in the session, the lack of follow-through activity in the complex added to the overall market pressure.

Front month January contracts led the losses of the day, although there remains uncertainty as to how many active trades developed at the lower price levels given the late day market pullback. Traders look for increased direction at the end of the week and are preparing for Friday's report, although limited pre-holiday activity may continue to keep markets sluggish through most of the week.

January feeders closed $1.28 lower at $221.9, March feeders closed $0.95 lower at $223.2 and April feeders closed $0.75 lower at $227.875. The CME Feeder Cattle Index for Dec.15: up $1.76, $219.91.

LEAN HOGS:

Lean hog futures moved lower for the second consecutive trading session as limited buyer interest was seen in all contracts. The quarterly hogs and pigs report will be released Friday, although this may add some direction to the market based on longer term production and supply levels, the overall impact is not expected to be significant as these factors are already being priced into the market.

Given the strong rally during the last week in lean hog futures, the pullback over the last two days is more focused on market positioning than a change in direction.

February lean hogs closed $1.03 lower at $70.55, April lean hogs closed $0.98 lower at $77.6 and May lean hogs closed $0.50 lower at $84.35. Tuesday's hog slaughter is estimated at 491,000 head, 17,000 head more than a week ago and 1,000 head more than a year ago. Pork Cutouts totaled 271.23 loads with 248.11 loads of pork cuts and 23.12 loads of trim. Pork cutout values are down $0.91 at $83.06. The CME Lean Hog Index for December 15: down $0.56, $66.59.

WEDNESDAY'S HOG CALL: Steady. Softness in futures prices and upcoming holiday procurement needs may limit upside market potential midweek.

Tuesday Midday Livestock Market Summary - Mixed Trade Limits Activity

GENERAL COMMENTS:

Light to moderate gains developed Tuesday morning in cattle trade as traders continue to focus on the increased market support seen Monday. At midday, buyer support started to erode following the initial release of cattle on feed estimates hitting the market. At this point, there is very limited movement in live cattle and feeder cattle trade, although the focus is moving from strong early week gains to moderately mixed price moves Tuesday.

Firm pressure is holding in lean hog trade as traders continue to assess current market supplies and overall short-term demand expectations. This could keep lean hog prices moving in a sideways trading range over the near future.

March corn is down 5 1/4 at $4.718 and January soybean meal is down $6.50 at $406.3. The Dow Jones Industrial Average is up 177.43 at 37,483.45.

LIVE CATTLE:

Live cattle trade remains mixed in limited direction. The inability for live cattle futures to hold the triple-digit gains seen early Monday is causing some uncertainty about additional upward price movement in front of the Christmas holiday.

For the week before Christmas, there continues to be a lot going on in the cattle market. Overall volume is expected to remain generally sluggish through the end of the year with markets closed for a day next week and the following week for the Christmas and New Year's holiday. However, this Friday will also be the release of the December cattle on feed report. Although initial estimates hit the news this morning, there will be some market adjustments seen through the rest of the week as well as next week.

Traders will not be able to actually trade the report until next Tuesday after coming back from the Christmas holiday. Early estimates point to an average estimate of 2% increase from year ago on feed numbers. This has softened early 2024 contract prices at midday.

Cash cattle activity remains at a standstill with bids and asking prices still not well developed. It could easily be Wednesday or later before active trade is seen in cash cattle markets. The reduced slaughter numbers for the holiday week could also limit packers' need to become as active in the market as in typical weeks.

December live cattle are $0.15 higher at $168.975, February live cattle are $0.38 lower at $169.25, April live cattle are $0.28 lower at $173.225. 

Boxed beef prices are mixed: choice up $0.02 ($288.95) and select down $0.30 ($236.42) with a movement of 68.29 loads (37.18 loads of choice, 13.29 loads of select, 8.51 loads of trim and 9.31 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have slowly pulled back from early week market gains, with nearby contracts steady to 62 cents lower at midday, while narrow to moderate gains are seen in deferred contracts. Early estimates for the upcoming cattle on feed report have been released, with overall placement numbers near 96% of year-ago levels.

Although larger placement numbers are not expected, the recent market rally has started to factor in the potential that significant pullback of cattle placed in feedyards may help build additional optimism heading into the new year. Even without the estimates affecting the market, the narrow pullback in prices is not out of line for normal market adjustments following the aggressive market shift higher in the last several days.

January feeders are $0.58 lower at $222.6, March feeders are $0.30 lower at $223.85 and April feeders are $0.03 higher at $228.65.

LEAN HOGS:

Firm pressure is seen in lean hog futures trade with traders still concerned about short term demand support given the current production levels and uncertainty of strong export demand during early 2024. Nearby contracts are holding losses of $1 per cwt or greater, while light to moderate pressure is seen in the second half of 2024. Trade is likely to remain sluggish through the rest of the day, with limited overall volume likely in the coming days due to the holiday weekend approaching.

February lean hogs are $0.98 lower at $70.6, April lean hogs are $1.20 lower at $77.375 and May lean hogs are $0.75 lower at $84.10. Hog Prices are higher on the Daily Direct Morning Hog report, up $0.88 with a weighted average of $50.29, ranging from $41.00 to $54.00 on 1,047 head with a five-day rolling average of $49.55. Pork Cutouts totaled 156.81 loads with 145.03 loads of pork cuts and 11.78 loads of trim. Pork cutout values are up $1.01 at $85.54.