DTN Closing Livestock Comment 12/04 16:05
Down Day for Cattle Contracts; Lean Hogs Mostly Higher
Cattle contracts struggled to keep losses less than $1.00, the lean hog
market was weak in spots but kept the bulk of the contracts higher.
By ShayLe Stewart
DTN Livestock Analyst
For about a month now, cattle contracts have been trading more or less
steady with days of higher prices followed with days of lower prices. As time
keeps etching closer and closer to the New Year, cattlemen anxiously await the
much anticipated boost that typically comes not too long after the ringing in
Jan. 1. Hog prices are higher again on the National Direct Morning Hog Report,
up $0.71 with a weighted average of $45.73. March corn is down 2 3/4 cents per
bushel and January soybean meal is up $2.00. The Dow Jones Industrial Average
is up 146.97 points and NASDAQ is up 46.03 points.
Live cattle contracts sank lower and packers are hesitant about bidding too
soon. December live cattle are down $1.10 at $119.45, February live cattle are
down $1.47 at $124.17 and April live cattle are down $1.22 at $125.00. As
contracts wane lower, packers sit back and let anxiousness build. It's no
secret that because of the shortened week last week, packers need to fill their
pens and get cattle bought, but feeders may have to wait until late in the week
to do so. A few head of fats sold Wednesday afternoon in Kansas for $119.50,
but it wasn't enough to really call business established for the week.
Boxed beef cutouts closed lower: choice down $3.20 ($226.95) and select down
$2.00 ($210.31) with a total movement of 153 loads (102.97 loads of choice,
21.41 loads of select, 10.94 loads of trim and 17.85 loads of ground beef).
Wednesday's slaughter is estimated at 121,000 head, 1,000 head less than a year
THURSDAY'S CASH CATTLE CALL: Steady to $1.00 higher. The board may be weak
right now, but the simple fact is that both feeders and packers know that
cattle must trade this week.
Down even sharper than the live cattle contracts, feeder cattle contracts
gave up significant ground on Wednesday. January feeders are down $1.50 at
$140.87, March feeders are down $1.50 at $141.42 and April feeders are down
$1.55 at $143.40. Sales are hit or miss right now with a lot depending of the
quality of the offering, how many cattle are consigned and how many buyers show
up. After chatting with an industry expert and longtime sale barn owner, he
mentioned that even though a lot of calves sold in October and November, there
still is a pile of calves left to be sold. Most cattlemen with significant
amounts of calves left to sell have their eyes peeled for the 2020 market and
hope like hell something will spark the complex.
On an estimated run of 1,922 head (up 1,544 head from last week), steers and
heifers at Interstate Regional Stockyard in Cuba, Missouri, sold steady to
$4.00 higher. It came as no surprise that lots of producers brought cattle to
town given the combination of calendar events, good weather and a stable feeder
market. The CME feeder cattle index 12/3/19: $145.19, up $0.16.
The lean hog sector was the only market able to keep positivity within in
realm. December lean hogs closed down $0.62 at $61.87, February lean hogs
closed $0.05 higher at $68.42 and April lean hogs close $0.47 higher at $74.75.
Pork cutouts totaled 297.38 loads with 250.31 loads of pork cuts and 47.06
loads of trim. Pork cutout values are up $0.39 at $81.00. Wednesday's hog
slaughter is estimated at 494,000 head, 15,000 head more than a year ago. The
CME lean hog index 12/02/19: $57.38, up $0.03.
THURSDAY'S CASH HOG CALL: Steady to $1.00 higher. Given that the lean hog
sector keeps building the board higher and the cash market steadily higher, the
current momentum built up should be able to carry into the later part of the
ShayLe Stewart can be reached at email@example.com
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