DTN Midday Livestock Comments 12/07 11:40
Mixed Tones Send Livestock Trading in Various Directions
The cash cattle market hasn't seen any attention but it's likely that some
early bids could develop Wednesday afternoon.
DTN Livestock Analyst
The livestock complex is trading mixed into Wednesday's afternoon as the
live cattle market aims to keep its modest rally through the day's close, but
with corn trending higher, feeders are keeping with their lower descend.
Meanwhile, the lean hog complex is trading mostly lower into Wednesday's
afternoon as midday pork cutout values show a steep loss. March corn is up 4
1/4 cents per bushel and January soybean meal is up $7.70. The Dow Jones
Industrial Average is down 2.20 points.
The live cattle complex is meekly trying to trade higher, but at this point,
the market's success is limited. The spot February contract crashed lower
Tuesday afternoon to the point where the market closed below its 100-day moving
average. One would hope that the market would be able to find some technical
support, but in order for traders to keep the technical price elevated, they'll
need to see something positive from the market's fundamentals. After having a
tough start to the week, boxed beef prices are trading higher at Wednesday's
midday, but until we see consistently higher beef prices, I wouldn't be quick
to say an official bottom has been found. The cash cattle market hasn't seen
any action at this point, but business could begin to develop later Wednesday
afternoon, or potentially wait until Thursday. Southern feedlots are asking
$156 to $157, and asking prices are still not established in the North.
The Fed Cattle Exchange Auction held Wednesday reported eight lots (six lots
in Texas and two lots in Colorado), totaling 1,023 head of cattle, none of
which sold. Opening prices were at $153, high bids had a range of $153 to
$153.50, but none of these bids met reserve prices of $155 to $156.
Boxed beef prices are higher: choice up $8.38 ($251.03) and select up $2.22
($221.36) with a movement of 88 loads (48.37 loads of choice, 15.00 loads of
select, 10.20 loads of trim and 14.81 loads of ground beef).
The volatile nature of the feeder cattle complex hasn't lessened whatsoever
as the live cattle market neglects to lend any support, and the corn complex is
pushing a modest $0.05 rally into Wednesday's noon hour. The market's saving
grace could be the cash cattle market if feedlots are indeed able to trade
cattle higher again this week, but at this point, that's still an unknown
variable as no cash cattle trade has developed. January feeders are down $0.22
at $181.57, March feeders are down $0.30 at $183.85 and April feeders are down
$0.27 at $187.05.
The lean hog complex is trading mostly lower into Wednesday's afternoon as
the market notices the slight uptick in cash prices, but that's not enough
support to offset the lower waning pork cutout value. December lean hogs are up
$0.27 at $82.55, February lean hogs are down $0.72 at $86.12 and April lean
hogs are down $0.75 at $92.05. The midday pork cutout report has bellies down
$20.39 which could be extremely detrimental to the afternoon's cutout value.
The projected lean hog index for Dec. 6 is down $0.16 at $82.78, and the
actual index for Dec. 5 is up $0.15 at $82.94. Hog prices on the Daily Direct
Morning Hog Report are higher, up $3.18 with a weighted average of $85.31,
ranging from $81.00 to $87.50 on 18,659 head and a five-day rolling average of
$84.38. Pork cutouts total 224.49 loads with 195.14 loads of pork cuts and
27.35 loads of trim. Pork cutout values: down $4.48, $85.34.
ShayLe Stewart can be reached firstname.lastname@example.org
Cattlemen are eager for supply and demand mechanics to swing their way, but
the market isn't completely free of hurdles as bearish concerns about the U.S.
and global economies loom. Hear DTN Livestock Analyst ShayLe Stewart's thoughts
on the 2023 cattle market at the all-virtual DTN Ag Summit on Dec. 12-13. Full
details available at http://www.dtn.com/agsummit
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