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DTN Midday Livestock Comments 11/25 11:48
Traders Continue to Support Livestock Contracts Actively Summary
It's safe to say that the market has put Friday's Cattle on Feed report
behind it as both the live cattle and feeder cattle markets are trading higher.
ShayLe Stewart
DTN Livestock Analyst
GENERAL COMMENTS:
It's been an eventful day already as the feeder cattle complex shot higher
early Monday morning upon hearing that Mexican cattle imports would be
restricted moving forward as a positive detection of New World screwworm was
found in Southern Mexico. The initial news sent the feeder cattle market
charging higher, but now that the market has settled down, feeders are trading
higher in a more modest manner as well are the live cattle and lean hog
contracts. December corn is down 1 1/2 cents per bushel and January soybean
meal is up $3.40. The Dow Jones Industrial Average is up 254.99 points.
LIVE CATTLE:
The live cattle complex is also trading higher into Monday's noon hour as
the market is thrilled to see higher boxed beef prices to start the week off
and is continuing to see ample trader support and willingness to advance the
complex. December live cattle are up $0.12 at $186.90, February live cattle are
steady at $188.20 and April live cattle are up $0.12 at $190.07. It's anyone's
guess at this point what the cash cattle market is going to see in terms of
packer demand as they could elect to virtually take the week off and enjoy the
holiday-shortened week. On the other hand, if beef demand is seeing a slight
holiday uptick, packers could be more active in this week's market than
originally assumed as they want to ensure that they have enough cattle for the
first week of December. New showlists for the week appear to be steady to
somewhat lower in Texas and Kansas, but slightly higher in Nebraska.
Last week Southern live cattle were traded at mostly $186 to $187, which is
$1.00 to $2.00 higher than the previous week's weighted average, but Northern
dressed cattle were sold at mostly $290 which is fully steady with the previous
week's weighted average.
Boxed beef prices are higher: choice up $2.36 ($309.77) and select up $0.77
($272.84) with a movement of 59 loads (29.04 loads of choice, 10.08 loads of
select, 4.14 loads of trim and 15.26 loads of ground beef).
FEEDER CATTLE:
It's been anything but a typical, lackadaisical Monday for the feeder cattle
complex as the market opened $3.00 to $4.00 higher upon hearing that a finding
of New World screwworm had been detected in a cow in the Southern Mexico state
of Chiapas which pushed the Animal and Plant Health Inspection Service (APHIS)
to restrict cattle imports from Mexico. You can access their full public
statement here:
https://www.aphis.usda.gov/news/agency-announcements/mexico-notifies-united-stat
es-new-world-screwworm-detection
It's known to everyone that the U.S. supply of feeder cattle is limited this
year with the historically low cowherd in which the industry currently sits,
which is partly why feeder cattle prices are currently as strong as they are.
But upon hearing this news out of Mexico, the feeder cattle market is
confidently continuing to trade higher as prices will likely continue to etch
higher and higher as feeder cattle buyers will have even fewer cattle to sort
through with Mexican imports being restricted. January feeders are up $0.85 at
$255.10, March feeders are up $0.85 at $253.95 and April feeders are up $0.82
at $255.17.
LEAN HOGS:
The lean hog complex is keeping with its rally into Monday's noon hour as
the market is currently well supported by consumers as the midday pork cutout
report jumps $4.38 higher. The sizeable increase in the morning's carcass price
has given traders an extra bit of support as they go up against resistance
levels. December lean hogs are up $0.60 at $82.27, February lean hogs are up
$0.92 at $86.60 and April lean hogs are up $0.85 at $90.67. What's especially
interesting to note about this morning's cutout report is that the only cut
that is lower is the belly, while the rest of the major cuts are all trading
higher, but the picnic is up the most as it's up $12.45.
The projected lean hog index for 11/22/2024 is down $0.55 at $86.46, and the
actual index for 11/21/2024 is down $0.43 at $87.01. Hog prices are unavailable
on the Daily Direct Morning Hog Report because of confidentiality. However, we
can see that only 660 head have traded and that the market's five-day rolling
average now sits at $83.72. Pork cutouts total 135.10 loads with 118.86 loads
of pork cuts and 16.24 loads of trim. Pork cutout values: up $4.38, $96.15.
ShayLe Stewart can be reached shayle.stewart@dtn.com
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