Thursday Morning Livestock Market Update - Cattle Traders Await Cash Trade

GENERAL COMMENTS:

The expectation was for cash to trade on Wednesday but that failed to surface. This gives the impression that the packers may not be short-bought as anticipated. Cash trade should surface today unless the packers can afford to hold out due to the upcoming holidays and the reduction of slaughter. It would then be up to feedlots if they want to or can afford to hold out. Live cattle futures have eliminated the technical breakout last week and are back below resistance. The Cattle on Feed report may limit the aggressiveness of traders unless cash cattle trade higher before the report. The average estimates for the Cattle on Feed report are for on feed as of December 1^st at 99.9% of a year ago. Placements in November at 95.9% and marketed in November at 98.2%. Boxed beef prices were lower with choice down $0.79 and select down $2.95. Feeder cattle showed lackluster trade following the lead of live cattle. Futures remain in a range.

Hog futures were able to hold gains through the August contract. The June and July contracts were able to hold above $100 after dipping below that level last week. The trade had anticipated cash hogs would not see much strength this week but the packers were more aggressive on Wednesday with the National Direct Afternoon Hog report showing cash up $0.24. The slaughter pace remains strong and hogs are needed to maintain the chain speed and satisfy demand. Pork cutouts gained $1.58 on Wednesday. The weekly hog weights increased by 0.4 pounds to an average of 289.5 pounds. This was 0.2 pounds lower than a year ago.

	BULL SIDE		BEAR SIDE
1)	Some bids were posted in Nebraska at steady prices with last week but feedlots did not budge as they looked for higher prices. The packers may need to raise bids to purchase cattle.	1)	Live cattle futures have fallen back below support after the breakout last week. Traders may be reluctant to be aggressive in the market ahead of the Cattle on Feed report.
2)	Cattle futures should remain supported ahead of the Cattle on Feed report as consumer demand remains strong and cattle are needed to meet that demand.	2)	If cash cattle trade is no better than steady money, further liquidation may surface as traders reduce their long positions.
3)	Hog futures seem to have established a sideways trading pattern which may hold through the end of the year.	3)	Hog futures have struggled recently. The head and shoulder technical formation may keep traders cautious.
4)	Weekly hog weights remained close to the previous week and a year ago. Hogs are not backing up in the country as continued strong slaughter should support prices.	4)	Pork demand is good but not exceptional. This may limit the upside price potential through the end of the year.

Wednesday Closing Livestock Market Update - Live Cattle Face Some Technical Push Back

GENERAL COMMENTS:

The live cattle complex struggled the most throughout the day as technical pressure grew more and more burdensome throughout the day, but the feeder cattle market also closed lower. Bids of $195 live and $305 dressed were offered throughout the day, but no cattle sold. March corn is down 6 1/4 cents per bushel and January soybean meal is down $7.70. The Dow Jones Industrial Average is down 1,123.03 points.

LIVE CATTLE:

The live cattle complex closed lower as the market faced some harsh technical realities throughout the day. It's likely some profit-taking is happening from money-managed funds, which escalated today's ascent. But the spot February contract closed just above the market's 40-day moving average and again fell below the market's resistance at $190. December live cattle closed $0.95 lower at $191.30, February live cattle closed $1.42 lower at $188.32 and April live cattle closed $1.10 lower at $190.47. Throughout the day bids of $195 live and $305 dressed were offered in Nebraska, but no cattle traded. Asking prices are firm in the South at $193 to $195 but are still not yet known for dressed cattle. Packer interest will likely improve tomorrow. 

Wednesday's slaughter is estimated at 123,000 head -- 2,000 head less than a week ago and 1,000 head less than a year ago.

Boxed beef prices closed lower: choice down $0.79 ($314.84) and select down $2.95 ($285.55) with a movement of 120 loads (50.27 loads of choice, 27.27 loads of select, 28.68 loads of trim and 13.75 loads of ground beef).

THURSDAY'S CATTLE CALL: Steady to somewhat higher. This week's trade will likely depend on how desperately packers need cattle. It's highly unlikely that feedlot managers let cattle trade for cheaper prices as they can simply roll this week's showlists over to next week as opposed to selling cattle for cheaper money.

FEEDER CATTLE:

The feeder cattle complex closed lower as the market simply didn't receive the complimentary support it needed in order to justify advancing the contracts throughout the day. From a fundamental standpoint the market's demand is still incredible, but the market continues to come up short of the technical support it desperately needs. January feeders closed $0.47 lower at $257.00, March feeders closed $0.90 lower at $257.37 and April feeders closed $0.97 lower at $258.40. At Winters Livestock Auction in La Junta, Colorado compared to last week feeder steers weighing under 600 pounds sold $4.00 to $9.00 higher, with instances of even sharply higher. Feeder steers over 600 pounds traded $2.00 to $5.00 lower. Feeder cattle supply over 600 pounds was 54%. The CME feeder cattle index 12/17/2024: up $0.46, $263.00.

LEAN HOGS:

The lean hog complex closed mixed with the market's nearby contracts able to close slightly higher while the deferred months still rounded out the day lower. Part of the market's ability to close higher came from the support of stronger pork demand as the carcass price closed $1.58 higher -- which was mainly thanks to the ham's $3.81 increase, and the belly's $2.89 gain. February lean hogs closed $0.50 higher at $83.70, April lean hogs closed $0.85 higher at $88.90 and June lean hogs closed $0.80 higher at $100.75.

Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.24 with a weighted average price of $78.03 on 2,490 head. Pork cutouts totaled 206.91 loads with 159.63 loads of pork cuts and 47.28 loads of trim. Pork cutout values: up $1.58, $96.35. Wednesday's slaughter is estimated at 488,000 head -- 1,000 head more than a week ago and 10,000 head more than a year ago. The CE lean hog index 12/16/2024: up $0.14, $83.98.

THURSDAY'S HOG CALL: Steady. Packers haven't been very aggressive in this week's market and given that the week is halfway over, it's unlikely that they're going to begin to start buying aggressively now as next week will be a holiday shortened kill week.

Wednesday Midday Livestock Market Summary - Cattle Continue to Dip Lower While Hogs Trade Higher

GENERAL COMMENTS:

The livestock complex is again trading mixed into Wednesday's noon hour as the cattle complex remains hesitant to advance the contracts before seeing what develops in the cash market, but the lean hog complex is trading higher. A couple bids have surfaced in Nebraska at $305 dressed, but still no cattle have traded. March corn is down 4 3/4 cents per bushel and January soybean meal is down $7.00. The Dow Jones Industrial Average is up 169.80 points.

LIVE CATTLE:

The live cattle complex is continuing to trail lower as anxiousness from traders seems to have the market's full attention. Some profit taking could also happen in the money managed sector as traders were leery of how long the market could sustain its position above the market's resistance at $190. December live cattle are down $0.75 at $191.50, February live cattle are down $0.87 at $188.87 and April live cattle are down $0.65 at $190.92. A bid of $305 is currently being offered in the North, but to no one's surprise, no cattle have traded just yet. Asking prices in the North are still unestablished, but Southern feedlots have their hopes set on getting $193 to $195 this week.

Boxed beef prices are lower: choice down $1.50 ($314.13) and select down $3.08 ($285.42) with a movement of 66 loads (31.40 loads of choice, 18.07 loads of select, 6.14 loads of trim and 10.79 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex is also trading lower at Wednesday's noon hour as the market isn't thrilled to see the live cattle complex committed to a downward trend. January feeders are down $0.32 at $257.15, March feeders are down $0.57 at $257.65 and April feeders are down $0.77 at $258.60. Wednesday's lower move doesn't reflect any changes in the countryside as demand remains incredible, but rather instead a reaction from traders as they're looking for additional market support.

LEAN HOGS:

After closing lower both Monday and Tuesday afternoon, the lean hog complex seems to have found some technical footing again in the marketplace, which is also complimented by the morning's higher note in pork cutout values. February lean hogs are up $0.45 at $83.65, April lean hogs are up $0.85 at $88.90 and June lean hogs are up $0.75 at $100.70. Although, the ham was pressured earlier this week, it's the leading reason this morning for the carcass's higher prices as it's up $1.47 and the picnic is up $1.36.

Hog prices are unavailable on the Daily Direct Morning Hog Report because of confidentiality. However, we can see that only 2,000 head traded Wednesday morning and that the market's five-day rolling average now sits at $79.03. Pork cutouts total 123.96 loads with 96.40 loads of pork cuts and 27.56 loads of trim. Pork cutout values: up $0.90, $95.67.

Wednesday Morning Livestock Market Update - Traders Search For Price Direction

GENERAL COMMENTS:

It seemed as if traders began focusing on the upcoming Cattle on Feed report Tuesday due to the uncertainty of price direction. It was too early to position themselves ahead of the report, but it seemed as if they did not want to trade aggressively in either direction. The cash cattle trade has not yet been established, leaving traders guessing as to the needs of packers. Boxed beef prices were lower with choice down $1.74 and select down $1.07. The average estimates for the Cattle on Feed report are for on feed as of Dec. 1 at 99.9% of a year ago. Placements in November at 95.9% and marketed in November at 98.2%. Feeder cattle pushed higher Tuesday regaining Monday's losses and holding in a sideways pattern.

The damage may have been done in hog futures with a renewal of the uptrend not likely through the end of the year. Packers were not aggressive on Tuesday with limited trading activity and lower cash. The National Direct Afternoon Hog report showed cash down $1.60. Packers may have some hogs already purchased for the holiday week and may wait until the end of the week to finish up purchases. Pork cutouts declined by $0.50, which adds to the negativity. Hog futures may be in trouble technically with a head-and-shoulders top potentially developing. Futures need to find support soon or further selling could develop.

	BULL SIDE		BEAR SIDE
1)	The expectation is that packers will need cattle and they may be willing to pay at least steady money to get them.	1)	Traders may not be overly anxious about pushing cattle futures in either direction ahead of cash trade and the Cattle on Feed report.
2)	Feedlots are in the position to hold for higher cash and if they do not receive it, they will hold the cattle over until they do.	2)	Last week, some cattle were purchased with time, leaving the potential for packers to be less aggressive this week. Reduced cattle numbers will be required over the holiday period.
3)	The managed money crowd does not seem anxious about liquidating their extremely long hog futures positions. The recent decline may be viewed as a buying opportunity.	3)	Hog futures will need to see strong buying interest soon or technical traders may liquidate due to a head-and-shoulders pattern developing and the end of the year.
4)	Hog futures may establish some stability and develop a sideways trading pattern moving through the rest of the year.	4)	The packers may be less aggressive in cash purchases as they may have much of their needs for next week already booked as slaughter will be reduced.