DTN Midday Livestock Comments          11/30 12:21

    Cattle Market Pressure Develops 

   Following a two-day run of higher prices in cattle futures, buyer support 
seems to be in short supply as live and feeder cattle futures are holding 
triple-digit losses. The overall lack of support at the end of November could 
create some additional market pressure. 

Rick Kment
DTN Analyst

GENERAL COMMENTS:

   Cattle futures have turned lower once again. November has been a very 
volatile market month, with spot live cattle futures trading within a $16 per 
cwt range, while spot feeder cattle futures moved within a $30 per cwt price 
range. This market volatility has led to additional market shifts and growing 
uncertainty about the ability to sustain recent gains. Also uncertain is just 
how much additional support can be expected through the end of the year. Lean 
hog futures are holding light to moderate gains in most contracts, as traders 
look for some end-of-month support from cash values and pork prices. But the 
overall movement in the complex may remain generally limited at the end of the 
month. March corn is up 7 1/4 at $4.83 and January soybean meal is down $2.70 
at $424.3. The Dow Jones Industrial Average is up 246.37 at 35,676.79.

LIVE CATTLE:

   Live cattle contracts have retracted a portion of the gains from the last 
two trading sessions with end-of-month losses developing Thursday morning. 
Although volume remains generally light, the lack of follow-through buyer 
support in the entire complex is very disappointing. Although prices have 
bounced back from month-long lows set early in the week, the significant price 
decline in the month of November cannot be easily overlooked. Spot contracts 
have posted a $13-per-cwt loss since the first of November, creating 
uncertainty as to whether late-calendar buyer support will develop before the 
end of the year. Cash cattle trade continues to trickle into the market, but 
this movement also brings market disappointment with the North posting sales at 
$275 per cwt Thursday morning. Although these prices are steady with midweek 
trade, current trade is $4 per cwt lower than last week's weighed average in 
the north, and generally $2 per cwt lower in the South. It is expected some 
trade will need to develop in the coming days, but the tone of the market may 
have been set already. The fact that cash markets have seen no support from 
this week's upward market movement is discouraging at best. December live 
cattle are $1.43 lower at $170.475, February live cattle are $2.00 lower at 
$171.475, April live cattle are $2.13 lower at $173.80. Boxed beef prices are 
higher: choice up $0.92 ($297.95) and select up $3.20 ($267.29) with a movement 
of 69.05 loads (49.11 loads of choice, 12.34 loads of select, zero loads of 
trim and 7.60 loads of ground beef).

FEEDER CATTLE:

   Feeder cattle futures are once again leading the cattle complex lower 
Thursday morning as traders are backing away from gains seen over the past two 
days. End-of-month position adjustments seem to be the main order of business 
for most traders Thursday as they try to square positions and close out 
holdings. The month of November has been bearish for feeder cattle contracts 
with spot January futures falling over $30 per cwt during the month, currently 
trading nearly $20 per cwt lower for the month. Although prices have moved 
firmly above multi-month lows in the past two trading sessions, the fact is 
prices are still nearly $50 per cwt below September and seasonal highs. 
Concerns of additional placements through the end of the year and 2024 beef 
demand growth continue to curb any long-term buyer support that tries to step 
into the market. January feeders are $2.83 lower at $219.375, March feeders are 
$2.63 lower at $221.65 and April feeders are $2.58 lower at $225.75.

LEAN HOGS:

   Lean hog futures are the bright spot of the livestock complex Thursday with 
light to moderate gains in most contracts. Even though buyer support remains 
extremely limited, compared to active triple-digit losses in cattle futures, 
this market seems much more stable for the moment. Traders remain concerned 
about the inability to consistently drive additional support into cash hog 
values or wholesale pork prices. But for now, it appears traders will stick 
with the current market direction through the end of November. December lean 
hogs are $0.03 higher at $69., February lean hogs are $1.38 higher at $71.475 
and April lean hogs are $0.85 higher at $77.325.

   Hog prices are lower on the Daily Direct Morning Hog report, down $1.68 with 
a weighted average of $59.76, ranging from $51.00 to $62.00 on 1,361 head with 
a five-day rolling average of $60.21. Pork cutouts totaled 171.67 loads with 
149.79 loads of pork cuts and 21.88 loads of trim. Pork cutout values are down 
$0.01 at $84.28.

   Rick Kment can be reached at kmentrick@gmail.com

   **

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