December 10, 2013
Fed cattle, steady to lower
Feeder cattle, steady
Lean hogs, steady to lower
Wall Street had difficulty finding direction Monday. With little corporate or economic news is coming today could be another day of seeking direction.
Meats, too, gained little direction overnight. A bit of a weaker tone could exist.
Cash fed cattle. On Monday USDA reported negotiated cash trade was inactive on light demand in all feeding regions.
Nebraska feedlots responding to a Dow Jones survey report offering 31,000 more cattle than last week. Colorado show lists are up 2,000 from last week. Kansas offerings are down 6,000. Texas show lists are up 4,000 from last week. That nets out to 31,000 more cattle on this week's show lists in the four states. Last week's show lists were down 39,000 from the previous week.
Last week in the Panhandle of Texas on Thursday trading was slow to moderate on moderate demand. Friday trading was at a standstill. For the week live sales sold steady at $132.
In Kansas trading was moderate to active on good demand Thursday. On Friday trading was limited with light demand. For the week live sales sold steady at $132.
In Nebraska on Thursday and Friday trading and demand were light to moderate. For the week live sales sold steady to $2 lower from $131 to $133. Dressed sales sold $1 to $2 lower from $208 to $209.
In Colorado Friday trading was moderate with light to moderate demand. For the week live sales sold $1 to $1.50 lower from $132.50 to $133.
In the Western Corn Belt on Thursday and Friday trading was slow with light to moderate demand. For the week the bulk of live and dressed sales sold steady at $132 and $209, respectively.
Monday's morning cutouts were higher with choice up $1.31 and select up $1.37. Afternoon cutout values were higher on moderate demand and light offerings. . Choice was up $1.05 at $202.52 with select up $1.14 at $188.12. Load count totaled 127.
USDA estimated Monday's cattle slaughter at 119,000, up 2,000 from last Monday but down, 6,000 from a year ago.
Cash feeder cattle. Compared to last week, Oklahoma National Stockyards reported yesterday's before Thanksgiving, last week's feeder cattle and calf markets were active following the Thanksgiving holiday week with many markets selling two weeks' worth of receipts.
Cattle futures. Fed cattle rose Monday, supported by expectations for the wholesale beef market to remain underpinned for the week ahead by a seasonal uptick in retail purchases of chucks, ribs and roasts for the holiday season.
A jump in midday beef prices confirmed that sentiment for some traders who contend that if retailers are willing to pay up for beef products, meatpackers have more incentive to bid aggressively for slaughter-ready cattle.
Trade chatter suggests the market is getting into last-minute buying for prime ribs and roasts. Seasonally, prices tend to rise in early December in anticipation of this buying activity, which some analysts see ending as abruptly as it began this year.
After the holidays, consumers often step on the scales and open holiday bills. Both help shift sentiment to paying bills rather than eating pricy cuts. The result--beef and live-cattle face pressure.
December live-cattle advanced 17 cents to a pit close of $131, after sliding 1.5% over the course of the past week. February picked up 20 cents to $133.05.
Feeder cattle advanced. Most-active January gained 67 cents to $165.15. Pit close on March was up 72 cents at $165.40. April was the big gainer, up 82 cents at $166.27.
The CME listed no tender notices to deliver on the expiring December fed cattle contract yesterday.
Bottom line. Monday's cutout rebound from Friday's plunge is constructive. Monday's futures gains are also positive. This week's sharply higher show lists look to be a surge in marketings. However, last week's show lists were about 39,000 fewer than the week before, making this week's show lists more in line with two weeks ago.
Cash hogs. Cautious hog buyers bid steady to $1 lower Monday.
USDA's afternoon reports showed Monday's weighted-average:
* National base price fell 12 cents to $78.11.
* Iowa-Minnesota fell $1.96 to $76.76.
* Western Corn Belt down $1.52 to $76.98.
* Eastern Corn Belt at $78.38 with no report for Friday.
Price changes are compared to USDA's afternoon report for Friday.
USDA estimated Monday's hog slaughter at 435,000, down 5,000 from last Monday, but up 7,000 from a year ago.
Data USDA collected under Mandatory Reporting showed Monday's morning plant cutout down $1.05 to $89.27. Afternoon cutout values were:
FOB plant down 14 cents at $90.18.
FOB Omaha up 3 cents at $89.61.
Based on 305 total loads.
After advancing six straight days and rising $2.08 over that period, the CME two-day lean hog index, calculated using USDA data, slipped Friday for a second day. It dipped 48 cents to $81.89. It's still off its recent low of $80.83 on Nov. 25, but remains below its recent peaks of $82.91 on Dec. 4, $91.48 on Oct. 24, $98.25 on Sept. 20 and $102.56 on Aug. 15.
Based on the new cutout Dow Jones estimated Monday's packer margin index at plus $20.77 per head vs. plus $18.57 on Friday.
Hog futures. Hogs ended mixed. Spot December slid to a new eight-month low for the fifth consecutive session, due to record-heavy hog weights and higher-than-expected current pork production. Other contracts rose as traders exited short positions.
December slid 30 cents to a pit close of $81.37, the lowest price for the spot contract since April 10. Most-active February advanced 85 cents to $89.85.
Bottom line. Plenty of hogs are available to meet immediate needs. Upticks in futures contracts for February and beyond fuel optimism. Overnight most deferreds gave back a bit of Monday's gains.