DTN Midday Livestock Comments 12/08 11:54

DTN Midday Livestock Comments          12/08 11:54

   Livestock Futures Find Support Friday Morning

   Late-week buyer support is seen in early trade through both cattle and hog 
futures. The ability to maintain these initial gains through the rest of the 
trading session seems to be needed to help instill additional confidence going 
into next week.

Rick Kment
DTN Analyst

GENERAL COMMENTS:

   Once again, the feeder cattle complex is the leader of the pack when it 
comes to price moves Friday morning. For now, the direction of markets is 
higher, with feeder cattle and live cattle trade holding moderate to strong 
gains, while lean hog futures are hanging onto limited midday gains, but unable 
to draw much market momentum at the end of the week.

   Cattle futures continue to struggle to gain enough long-lasting support to 
move prices from long-term support levels, with underlying technical and 
fundamental weakness seen across the market. The ability to push prices higher 
at the end of the week may not help bring quick relief to the oversold market 
structure, but it would help set the tone for more consistent buyer interest 
early next week.

   March corn is up 1 3/4 at $4.898 and January soybean meal is up $4.50 at 
$411.3. The Dow Jones Industrial Average is up 1.16 at 36,118.54.

LIVE CATTLE:

   Live cattle futures have gained support through the morning with early gains 
holding, but additional buyer interest moving into the complex following the 
release of the December WASDE report. The report has not significantly changed 
the overall direction of the market, but the report posted unchanged production 
expectations for 2023, and a 180-million-pound increase for 2024 from last 
month's estimate. The increased feeder cattle placement numbers over the past 
two months has increased the focus of beef production gains.

   Even with this production boost reported, traders feel that this has already 
been factored into the market, and the current increase is causing a calming 
effect on price levels, allowing buyers the room to expand gains from early 
trade. It is still uncertain if price support will be able to hold through the 
end of the session, but the positive Friday moves are a welcome sight.

   Cash cattle activity remains slow and generally quiet Friday morning with no 
bids redeveloping following midweek trade. Asking prices on cattle are listed 
around $172 live basis in the South and $272 per cwt dressed in the North. Even 
though overall estimated numbers remain generally light, the bulk of the weekly 
business could be wrapped up. There is the possibility that some clean up 
activity may develop through the rest of the day.

   Reported cash cattle trade earlier this week is listed at $171 live basis, 
$3 per cwt lower than last week's weighted average, and $271 per cwt dressed in 
the North which is $4 per cwt lower than last week. December live cattle are 
$2.40 higher at $164.75, February live cattle are $2.75 higher at $165.275, 
April live cattle are $2.60 higher at $168.55. Boxed beef prices are mixed: 
choice down $1.54 ($288.30) and select up $0.08 ($258.91) with a movement of 
119.00 loads (77.21 loads of choice, 16.94 loads of select, 5.82 loads of trim 
and 19.03 loads of ground beef).

FEEDER CATTLE:

   Feeder cattle futures have gained additional momentum at midday following 
the December WASDE report. The increase in beef production levels from 
November's report confirmed what the market has already known, but with overall 
production expected to increase 180 million pounds over previous estimates, 
traders feel that this has already been factored into the market.

   Nearby contracts are trading $4 to $5 per cwt higher with active support 
already in the complex.

   The ability to minimize the weekly damage seen in feeder cattle trade at the 
end of the week is likely to help instill follow-through buyer support early 
next week.

   January feeders are $5.03 higher at $215.3, March feeders are $4.70 higher 
at $215.875 and April feeders are $4.23 higher at $218.65.

LEAN HOGS:

   Lean hog futures are holding moderate support midday after struggling to 
find any secure footing through much of the morning. The December WASDE report 
released midmorning was generally neutral to lean hog markets, but the lack of 
bearishness in the report is taken as a breath of fresh air and has allowed 
limited but supportive buying activity to move back into the complex. The 
potential to create firm and consistent buying activity over the upcoming days 
and weeks is likely to add additional technical support to the entire complex.

   December lean hogs are $0.40 higher at $67.95, February lean hogs are $0.50 
higher at $68.275 and April lean hogs are $0.63 higher at $75.25. Hog Prices 
are lower on the Daily Direct Morning Hog report, down $1.33 with a weighted 
average of $52.59, ranging from $49.00 to $54.00 on 2,976 head with a five-day 
rolling average of $54.46. Pork Cutouts totaled 143.34 loads with 130.97 loads 
of pork cuts and 12.37 loads of trim. Pork cutout values are down $2.16 at 
$81.35.

   Rick Kment can be reached at kmentrick@gmail.com




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