DTN Midday Livestock Comments          12/07 11:41

   Cattle Futures Stabilize Thursday Morning

   The break away from aggressive losses is a relief in all cattle markets, 
although the downside pressure seen over the last few weeks is creating 
significant uncertainty about just how much short-term upside market potential 
can be expected before the end of the year. Hog futures continue to erode 
following lackluster interest midweek, but remain lightly traded, still in the 
current sideways trading pattern.

Rick Kment
DTN Analyst

GENERAL COMMENTS:

   Moderate gains have developed and held in feeder cattle futures as traders 
are focusing on covering short positions after the aggressive market tumble 
seen Wednesday. The support across feeder cattle trade is helping to instill 
limited but supportive spillover buying in the live cattle complex, although 
these gains are very limited through most of the morning trade.

   Lean hog futures are showing firm market pressure, although this has not 
broken out of the current sideways trading pattern. The fundamental market 
weakness seen in cash values and pork values in early December is creating some 
underlying concern through the entire futures complex.

   March corn is up 3 1/2 at $4.878 and January soybean meal is down $1.00 at 
$407.50. The Dow Jones Industrial Average is up 5.53 at 36,059.96.

LIVE CATTLE:

   Price stability is seen in live cattle futures early Thursday morning. 
Nearby contracts are steady to moderately higher at midday as firm support has 
trickled back into the feeder cattle futures. The aggressive triple-digit price 
freefall seen in live cattle and feeder cattle trade late Wednesday has limited 
additional selling pressure and allowed for light to moderate short covering in 
what is still expected to be an oversold market. Despite the complex remaining 
in an oversold status, the combination of technical and fundamental weakness is 
making traders extremely hesitant to actively step into the complex.

   In the weekly export sales report, net sales of 200 mt for 2023 -- a 
marketing-year low -- were down 98% from the previous week and from the prior 
four-week average. Increases primarily for Japan (1,800 mt, including decreases 
of 1,100 mt), Mexico (1,300 mt, including decreases of 100 mt), China (900 mt, 
including decreases of 700 mt). Exports of 13,700 mt were up 7% from the 
previous week, but down 2% from the prior four-week average. The destinations 
were primarily to South Korea (3,900 mt).

   Cash cattle activity remains quiet Thursday morning following light trade in 
all areas Wednesday. It is expected that some additional cattle trade will need 
to develop over the next couple of days, but it is still uncertain just how 
solid the previous price tone is and the potential to break away from the 
recent market pressure. Cattle trade in the South is reported at $171 per cwt, 
$3 per cwt lower than last week's weighted average, but generally steady with 
earlier week trade. Northern dressed trade was reported at $271 per cwt, $4 per 
cwt below last week's weighted average.

   December live cattle are $0.18 higher at $163.625, February live cattle are 
$0.18 higher at $163.725, April live cattle are $0.20 higher at $166.875. Boxed 
beef prices are mixed: choice down $1.94 ($288.62) and select up $0.44 
($260.34) with a movement of 106.73 loads (60.21 loads of choice, 10.54 loads 
of select, zero loads of trim and 35.98 loads of ground beef).

FEEDER CATTLE:

   Moderate gains have developed and held through the morning in feeder cattle 
futures. The ability to draw even light to moderate support into the complex 
following aggressive $5 per cwt losses midweek is indicating that selling 
pressure may be slowing significantly as the week continues. Technically, the 
overall tone of the market remains weak with prices Front month January 
contracts set contract lows Wednesday, with the hope that buyer support can 
continue to firm and move off these recent support levels. This means that the 
January feeder cattle contract has traded back and forth within a $58 per cwt 
trading range during the life of the contract.

   January feeders are $1.68 higher at $211.825, March feeders are $0.88 higher 
at $212.625 and April feeders are $0.43 higher at $216.075.

LEAN HOGS:

   Lean hog futures have eroded through morning trade with nearby contracts 
holding losses of $1 to $2 per cwt. The recent softness in cattle futures is 
having some spillover impact on 2024 lean hog buying support, but traders 
remain focused on prices remaining within the previous short-term market range. 
Although prices are working closer to support levels due to the most recent 
market pullback, technical support remains at this point.

   In the weekly export sales report, net sales of 25,900 mt for 2023 were up 
23% from the previous week, but down 14% from the prior four-week average. 
Increases primarily for South Korea (10,100 mt, including decreases of 500 mt), 
Mexico (7,800 mt, including decreases of 1,000 mt), Japan (2,700 mt, including 
decreases of 700 mt). Exports of 32,300 mt were up 16% from the previous week 
and 2% from the prior four-week average. The destinations were primarily to 
Mexico (12,700 mt), South Korea (4,500 mt), Japan (3,800 mt), China (2,500 mt), 
and Canada (2,000 mt).

   December lean hogs are $0.03 lower at $67.525, February lean hogs are $1.05 
lower at $68.25 and April lean hogs are $1.45 lower at $74.50. Hog Prices are 
lower on the Daily Direct Morning Hog report, down $0.97 with a weighted 
average of $53.92, ranging from $48.00 to $55.00 on 895 head with a five-day 
rolling average of $55.05. Pork Cutouts totaled 156.62 loads with 136.84 loads 
of pork cuts and 19.78 loads of trim. Pork cutout values are down $0.28 at 
$83.51.

   Rick Kment can be reached at kmentrick@gmail.com

   **

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