DTN Midday Livestock Comments 12/08 11:46
Livestock Contracts Trade Weaker Wednesday
It's a hem-haw day for the livestock complex as bearish tones drift
throughout the complex and support has yet to show up in any of the contracts.
DTN Livestock Analyst
Heading into Wednesday afternoon, the livestock contracts would like to see
some support enter the marketplace; but at this point in time it's not looking
like they are going to have their wishes granted. There hasn't been much
interest arise in the cash cattle market and it wouldn't be surprising to see
trade wait until Thursday to get underway. March corn is up 1 3/4 cents per
bushel and January soybean meal is up $7.80. The Dow Jones Industrial Average
is down 74.43 points and NASDAQ is up 32.36 points.
Live cattle futures are continuing to chop mostly sideways throughout
Wednesday trade with a bearish attitude pressuring the day. With boxes printing
lower at noon and the futures market trading with a weaker undertone, the cash
cattle market (though having regained substantial leverage) is going to see
pushback from packers. December live cattle are down $0.45 at $137.77, February
live cattle are down $0.12 at $139.10 and April live cattle are down $0.12 at
$142.32. Bids of $220 have been offered in Nebraska, but otherwise the market
hasn't seen much interest thus far. Asking prices are set at $144 to $145 in
the Southern Plains, and in the North at $224. It wouldn't be unlikely to see
trade remain mostly quiet throughout Wednesday and not gain much attention
until Thursday, or potentially even Friday.
The Fed Cattle Exchange Auction listed a total of 1,849 (Texas 1,386 head,
Kansas 392 head, California 71 head head), none of which actually sold, as they
did not meet the reserve prices, which ranged from $134 to $143.50. Opening
prices ranged from $132 to $139; high bids ranged from $132.25 to $140
Boxed beef prices are lower: choice down $0.79 ($267.24) and select down
$1.10 ($254.58) with a movement of 83 loads (52.19 loads of choice, 12.50 loads
of select, 7.18 loads of trim and 10.68 loads of ground beef).
The corn market isn't pressuring the feeder cattle contracts, but without
substantial support stemming from either the live cattle contracts or the cash
cattle market, the feeder cattle contracts are trading modestly lower
Wednesday. January feeders are down $1.25 at $163.77, March feeders are down
$0.70 at $166.77 and April feeders are down $0.92 at $169.92. Sale barns only
have this week and next before most head out for the remainder of the year to
take some much-needed time off. With that being the case, sales are seeing
large receipts this week and thus far they've been met with strong interest.
The lean hog market's lower move has continued into Wednesday and is likely
to continue throughout the afternoon. December lean hogs are down $1.07 at
$71.00, February lean hogs are down $0.17 at $76.37 and April lean hogs are
down $0.35 at $81.70. One of the most frustrating things about the current lean
hog market is the back-and-forth nature of the cash and pork cutout values. The
market is desperately seeking strong cues from both the technical and
fundamental sides of the market to help everyone better understand the
long-term trajectory. But with the market's daily knee-jerk reactions (sharply
higher one day, sharply lower the next day) a clear vision for the market's
outlook is hard to understand. And while hog producers yearn for a clear
understanding of the market's path, it's likely this type of back-and-forth
nature continues throughout the remainder of the year.
The projected CME Lean Hog Index for 12/7/2021 is down $0.11 at $70.83, and
the actual index for 12/06/2021 is up $0.16 at $70.94. Hog prices are lower on
the National Direct Morning Hog Report, down $2.66 with a weighted average of
$55.52, ranging from $55.00 to $61.00 on 3,860 head and a five-day rolling
average of $57.09. Pork cutouts totaled 215.20 loads with 185.07 load of pork
cuts and 30.13 loads of trim. Pork cutout
ShayLe Stewart can be reached email@example.com
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