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DTN Midday Livestock Comments 12/02 11:48
Monday Morning Spurs Reversal in Feeder Cattle Market
Both the live cattle and feeder cattle markets are trading lower after
traders grow sheepish of the market's resistance.
ShayLe Stewart
DTN Livestock Analyst
GENERAL COMMENTS:
Both the live cattle and feeder cattle contracts are trading lower as there
appears to be some profit-taking happening in the feeder cattle complex as the
contracts have plummeted $2.00 to $3.00 this morning. And given that the feeder
cattle complex has been leading the recent charge in the cattle complex, it's
only fitting that both markets are trading lower into Monday's noon hour after
starting the day off higher. March corn is steady and January soybean meal is
down $4.60. The Dow Jones Industrial Average is down 159.84 points.
LIVE CATTLE:
The feeder cattle complex and the cash cattle market's momentum have
recently been the biggest driving forces dictating the direction in which the
live cattle contracts would trade. And so with the knee-jerk reaction of seeing
feeders "hit the floor" and cut $2.00 to $3.00 out of their market without any
hesitancy, it comes as no surprise that the live cattle market is also trading
lower. December live cattle are down $0.45 at $187.52, February live cattle are
down $1.15 at $187.47 and April live cattle are down $1.10 at $189.67. It's
evident that packers were short bought heading into last week's market, and
although they did commit most of last week's purchases to the nearby delivery,
this week's cash cattle trade may still be well supported if packers are still
short bought. Time will tell and it's unlikely that trade will develop before
Thursday or Friday.
Last week Southern live cattle traded at mostly $190 which is $4.00 higher
than last week's weighted average, and Northern dressed cattle traded at mostly
$291 to $306, but mostly at $295 which is $5.00 higher than last week's weighed
average. Last week's negotiated cash cattle trade totaled 79,753 head. Of that,
69% (55,128 head) were committed to the nearby delivery, while the remaining
31% (24,625 head) were committed to the deferred delivery.
Boxed beef prices are higher: choice up $1.33 ($311.85) and select up $2.46
($276.76) with a movement of 24 loads (13.77 loads of choice, 6.97 loads of
select, zero loads of trim and 3.26 loads of ground beef).
FEEDER CATTLE:
It's already been a whiplashing day for the feeder cattle complex as the
market was charging, full steam ahead at Monday's start, but as the day's noon
hour approaches, there seems to be some profit-taking happening in the futures
complex which has led the contracts to dive $2.00 to $3.00 lower. And given
that the contracts began to pressure the summertime highs reached just a couple
of months ago, it's not all that bewildering to see some correction taking
place early this week. But given that Mexican cattle imports are still being
restricted, the market may recover and turn optimistic again at some point this
week as demand in the countryside hasn't lessened. January feeders are down
$2.65 at $256.82, March feeders are down $2.72 at $255.90 and April feeders are
down $2.60 at $257.02.
LEAN HOGS:
The lean hog complex is charging ahead into this new week as the market
continues to be well supported by traders, and thankfully even pork cutout
values are higher at noon too. Part of last week's weakness was the fact that
consumer support wasn't stable, but thankfully demand isn't an issue this
morning as retailers are likely restocking their coolers after the Thanksgiving
holiday. December lean hogs are up $0.85 at $82.92, February lean hogs are up
$1.02 at $87.37 and April lean hogs are up $1.17 at $91.92.
The projected lean hog index for 11/29/2024 is down $0.85 at $84.36, and the
actual index for 11/27/2024 is down $0.30 at $85.21. Hog prices are unavailable
on the Daily Direct Morning Hog Report because of confidentiality. However, we
can see that only 135 head have traded and that the market's five-day rolling
average sits at $86.85. Pork cutouts total 143.36 loads with 114.64 loads of
pork cuts and 28.72 loads of trim. Pork cutout values: up $2.95, $93.26.
**
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ShayLe Stewart can be reached shayle.stewart@dtn.com
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