DTN Midday Livestock Comments 12/20 11:22

Stronger Tones Sweep the Livestock Complex

A single bid of $191 is currently being offered in Kansas, but otherwise,
the market has been silent in terms of cash cattle trade.

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

It's been a refreshing day in the livestock complex as all three of the
markets are trading higher into Friday's noon hour. This afternoon the industry
will be closely watching to see what comes of the Cattle on Feed report and if
any more cash cattle trade does indeed develop. March corn is up 5 cents per
bushel and March soybean meal is up $8.90. The Dow Jones Industrial Average is
up 799.65 points.

LIVE CATTLE:

Following Thursday's slight derailment in terms of the live cattle
contracts' performance, it's refreshing to see the contracts again trading
higher on Friday. After plummeting to a level that the spot February contract
swooped below the market's 40-day moving average, the additional fundamental
support of the cash cattle market's trade seems to set well with the market.
I'm hopeful that traders deem the futures market's correction this past week
sufficient and that no more immediate downside pressure will surface in the
complex again soon. But I know that with their decision to push the contracts
lower, all having been for technical reasons, unfortunately, we can't put too
much confidence in what the market's fundamentals accomplish. Some more cash
cattle trade could develop after the Cattle on Feed report is released, but at
this point, the market sits idle with only one bid in Kansas at $191 being
shown. This week Northern dressed business has had a range of $303 to $308,
mostly $305, $2 higher than last week's weighted average basis Nebraska.
Southern live deals have been marked at $191, fully steady with last week's
weighted averages. Note that Texas has been very quiet with no to little sales
reported.

Boxed beef prices are lower: choice down $4.42 ($316.27) and select down
$0.55 ($283.56) with a movement of 75 loads (49.08 loads of choice, 12.80 loads
of select, 7.33 loads of trim and 5.50 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex is also trading higher into Friday's noon hour as
the market has seemed to have found some technical stability following
Thursday's lower close, and it's also helpful that the fed cash cattle market
traded cattle steady to $2.00 higher on Thursday as well. January feeders are
up $1.07 at $255.55, March feeders are up $1.35 at $255.92 and April feeders
are up $1.27 at $256.72. So long as the live cattle contracts continue to trade
in a higher direction, it's likely that the feeder cattle contracts will also
be able to round out the week on a stronger note as well.

LEAN HOGS:

Could it be that after some strenuous pressure early this week, the lean hog
complex has regained some technical footing in the marketplace? If Friday's
direction and technical momentum have anything to do with it -- I'd say the
answer is yes as today's higher move solely stems from trader objectivity as
the market's fundamentals aren't lending support. Please note that on Monday,
December 23rd the Quarterly Hogs and Pigs Report will be released. February
lean hogs are up $1.52 at $85.15, April lean hogs are up $1.35 at $89.97 and
June lean hogs are up $1.02 at $101.82.

The projected lean hog index for 12/19/2024 is up $0.14 at $84.35, and the
actual index for 12/18/2024 is up $0.05 at $84.21. Hog prices are unavailable
on the Daily Direct Morning Hog Report because of confidentiality. However, we
can see that only 345 head have traded and that the market's five-day rolling
average now sits at $78.99. Pork cutouts total 183.59 loads with 166.55 loads
of pork cuts and 17.04 loads of trim. Pork cutout values: down $0.38, $95.97.

ShayLe Stewart can be reached shayle.stewart@dtn.com




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