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DTN Midday Livestock Comments          12/01 11:38

   Lean Hog Charts Post Sudden Recovery

   Cash cattle deals this week are being marked anywhere from $155 to $157 so 
far, which is steady to $2 higher than last week's weighted averages. 

Elaine Kub
Contributing Analyst

GENERAL COMMENTS:

   Cash cattle deals this week are being marked anywhere from $155 to $157 so 
far, which is steady to $2 higher than last week's weighted averages. Losses in 
the feed grain markets Thursday are giving feeder cattle futures contracts an 
opportunity to explore mixed or higher prices during the middle of the session. 
Lean hog futures, meanwhile, have suddenly and emphatically decided to erase 
all of the week's previous panicky losses with gains of more $2 per cwt. 
December corn is down 8 1/4 cents per bushel and December soybean meal is down 
$1.60 per ton. The Dow Jones Industrial Average is down 330 points.

LIVE CATTLE:

   The live cattle futures market continues to linger within a dollar or two of 
its recent contract highs, but without the day-to-day volatility of more 
headline-driven markets. December live cattle are down $0.375 at $152.70, 
February live cattle are down $0.575 at $155.10 and April live cattle are down 
$0.325 at $158.95. The April contract, for instance, would only have to stretch 
about $1.50 higher to exceed the contract high from last week ($160.30), but 
without some fresh momentum or encouragement from the physical market, may see 
no reason to do so. The cash cattle trade that's been seen so far on Thursday 
includes Nebraska steers and heifers at $157, and some northern dressed 
business at $244 to $245, steady with last week. That builds on trade earlier 
this week in parts of the South at $155, also steady with last week, but recall 
that last week's prices were themselves a $3 week-over-week jump -- a 
performance that may be hard to repeat. Thursday's slaughter is estimated at 
128,000 head, which is 4,000 more than a year ago.  

   Boxed beef prices are higher Thursday morning: choice up $0.23 ($255.11) and 
select up $1.97 ($226.98) with a movement of 87 loads (67.88 loads of choice, 
8.43 loads of select, 4.62 loads of trim and 6.22 loads of ground beef).

FEEDER CATTLE:

   Talk of rejiggering some biofuels mandates has sent the soybean market into 
a tailspin Thursday, with soybean meal and corn following along lower. The 
feeder cattle market therefore feels a little relief about feed prices and 
spent some of the morning in higher territory before sagging lower. January 
feeders are down $0.15 at $180.325, March feeders are up $0.20 at $183.65 and 
April feeders are up $0.375 at $187.175. Even stable strength is a reminder of 
the long-term bullish supply-and-demand scenario for calves in this 
drought-plagued country. Trading volume tends to grow more active during the 
afternoon, and the focus of the long-term bullishness -- and the best potential 
for gains at the session's close -- may be centered around the deferred 
contracts for mid-2023 and beyond.

LEAN HOGS:

   The February lean hog contract is moving enthusiastically higher Thursday, 
at one point trading above $88 per cwt and effectively erasing all of this 
week's previous bearish angst about Chinese Covid lockdowns. December lean hogs 
are up $0.025 at $82.925, February lean hogs are up $2.70 at $88.05 and April 
lean hogs are up $2.575 at $93.225. Gains of $2 or more extend all the way 
through the August 2023 contract, although in none of these cases do the gains 
extend past the highs established early last week. The February contract has 
struggled to maintain buying interest any time it's attempted to move above 
$90, and with domestic pork prices stalling and the cash prices for lean hogs 
experiencing pressure from the packers this week, the futures market will 
likely resist sticking its neck out too far. Thursday's slaughter is seen at 
492,000 head, which is 9,000 more than a year ago at this time.

   The projected CME Lean Hog Index for Nov. 29 is down $0.32 at $83.89, and 
the actual index for Nov. 28 was down $0.42 at $84.21. Thursday's Daily Direct 
Morning Hog Report is delayed by technical difficulties, but for a benchmark, 
the latest 5-day rolling average was $84.73. Pork cutouts total 145.03 loads 
with 113.55 loads of pork cuts and 31.48 loads of trim. Pork cutout values: up 
$0.28, $87.61.

   **

   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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