DTN Midday Livestock Comments          12/06 11:29

   Hogs Hungry for Technical Support 

   The cattle contracts are trading mixed into Monday's afternoon, but the lean 
hog complex desperately needs interest from traders to help its dreary trade. 

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   The live cattle complex has found support for nearby contracts, but the 
marketplace is looking for support in both the deferred live cattle contracts 
and in the hog sector. If the live cattle market can conquer the week with 
steady to higher cash cattle trade again, then the feeder cattle market stands 
an excellent chance at rallying. March corn is down 5 1/2 cents per bushel and 
January soybean meal is down $6.50. The Dow Jones Industrial Average is up 
621.32 points and NASDAQ is up 57.06 points.

   LIVE CATTLE:

   Live cattle futures are mixed, higher in the nearby contracts but slightly 
lower in the deferreds, which seems somewhat strange as market-ready supplies 
of fat cattle are likely to get thinner and thinner the further the market dips 
into 2022. Mondays are typically a tough day for the live cattle complex, so 
seeing trader support right from the get-go is encouraging as the futures 
market tends to determine the long-term success of a rally. As of late there's 
no doubt the cash cattle market has been in the driver's seat, but thankfully 
the futures market hasn't been too slow to react positively to the cash 
market's momentum. December live cattle are up $0.22 at $137.90, February live 
cattle are up $0.80 at $139.72 and April live cattle are up $0.62 at $142.77.

   Last week's negotiated cash cattle trade totaled 112,080 head. Of that 76% 
(85,680 head) were committed for the nearby delivery, while the remaining 24% 
(26,400 head) were committed for the deferred delivery. While the market is 
thankful to have successfully traded another week of higher prices and volume 
over 100,000 head -- it's evident packers are beginning to add to their 
deferred supply, which could be a hinderance to the market moving forward. Last 
week Southern live cattle traded from $140 to $142, but mostly at $142, which 
is $3.00 higher than the week before; Northern dressed cattle traded from $217 
to $221, but mostly at $220, which is $3.00 higher as well.

   Boxed beef prices are mixed: choice down $0.03 ($274.33) and select up $1.68 
($260.32) with a movement of 47 loads (34.84 loads of choice, 7.80 loads of 
select, zero loads of trim and 4.66 loads of ground beef).

   FEEDER CATTLE:

   Feeder cattle futures have struggled to find adequate support throughout 
Monday's initial trade. The market would love nothing more than to continue to 
trade higher and, from a fundamental standpoint, feeder cattle and calf demand 
is there supporting the complex; but at this point traders aren't as confident. 
It's likely that later in the week when the cash cattle market begins to trade 
traders will either step to the plate and help the market turn higher or 
continue to allow the market to drift lower. Thankfully Monday's lower 
regression comes at a modest pace, which is in part thanks to the corn market's 
lower trend as well. If corn prices were boiling higher, the market would 
likely be suffering greater losses. January feeders are up $0.10 at $164.22, 
March feeders are down $0.17 at $166.92 and April feeders are down $0.10 at 
$169.75.

   LEAN HOGS:

   The lean hog market isn't traipsing into Monday's trade with much support 
from the technical side of the market, and the fundamental side of the complex 
has complexly flip-flopped its position from last week. As the futures tumble 
lower, the cash market endured weaker prices and less interest while pork 
cutout values jumped higher. It's not that shocking to see the cash hog market 
unsupported come Monday morning as last week packers were extremely aggressive 
in procuring hogs. And in terms of the pork cutout market's snazzy $7.00 gain, 
I caution you to wait until the day's close before getting too excited as the 
morning cutout report is volatile. December lean hogs are down $1.52 at $72.47, 
February lean hogs are down $2.40 at $79.10 and April lean hogs are down $1.60 
at $84.27.

   The projected CME Lean Hog Index for 12/3/2021 is up $0.25 at $70.78, and 
the actual index for 12/2/2021 is down $0.33 at $70.53. Hog prices are lower on 
the National Direct Morning Hog Report, down $2.26 with a weighted average of 
$56.16, ranging from $55.00 to $62.50 on 3,706 head and a five-day rolling 
average of $56.44. Pork cutouts total 217.22 loads with 186.19 loads of pork 
cuts and 31.04 loads of trim. Pork cutout values: up $7.93, $89.30.

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




(c) Copyright 2021 DTN, LLC. All rights reserved.