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DTN Midday Livestock Comments          12/01 11:42

   Cattle Shake Market's Bearish Woes 

   With bids of $138 now being offered throughout the entire feeding region, 
packers are beginning to wonder if they are going to have to up their bids in 
order to get cattle bought. 

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   Both live and feeder cattle futures are rallying into Wednesday afternoon 
trade, no longer fearing the market, and instead looking to re-spark their 
rally. The lean hog market isn't as lucky as its contracts are trending lower, 
but the futures are thankful to continue to see the packers fully support the 
cash market. March corn is up 7 1/4 cents per bushel and January soybean meal 
is up $10.10. The Dow Jones Industrial Average is up 367.73 points and NASDAQ 
is up 187.25 points.

   LIVE CATTLE:

   Packers were hoping the futures would continue their downward descent 
throughout the day and give them the chance to bid steady prices and worry 
feedlots. But with the recent gain in leverage that feedlots have secured, 
they're much more confident in demanding higher prices and sit in a fine 
position regarding their showlists to demand more money. Bids of $138 are on 
the table all throughout the five-state feeding region, but thus far feedlots 
haven't paid them any attention. Asking prices in the South are noted at 
$143-plus and still the North has yet to disclose what they're asking. It's 
likely $138 won't be sufficient to get cattle bought this week and packers are 
going to have to flop open their checkbooks with more aggressive bids. December 
live cattle are up $0.70 at $136.57, February live cattle are up $1.02 at 
$138.92 and April live cattle are up $1.07 at $142.17.

   The Fed Cattle Exchange Auction listed a total of 1,868 head (Texas 1,727 
head, Kansas 141 head), none of which actually sold as they did not meet the 
reserve prices, which ranged from $140 to $141. Opening prices ranged from 
$137.50 to $138; high bids ranged from $138 to $139.

   Boxed beef prices are lower: choice down $0.60 ($271.08) and select down 
$0.75 ($259.54) with a movement of 140 loads (108.94 loads of choice, 11.67 
loads of select, 4.89 loads of trim and 14.38 loads of ground beef).

   FEEDER CATTLE:

   Feeder cattle futures are rallying after trading lower earlier this week. 
January feeders are up $0.45 at $165.32, March feeders are up $1.00 at $167.47 
and April feeders are up $1.22 at $170.05. Even though the futures market was 
softer on both Monday and Tuesday, that didn't dampen demand whatsoever 
throughout the countryside. With last week's fat cattle market championing 
$140, buyers are anxious to fill their pens as they see the 2022 market being 
rewarding. Corn prices are posting a modest 6- to 7-cent rally in the nearby 
contracts, so if the live cattle market doesn't offer support, the feeder 
cattle complex could grow wary over higher inputs.

   LEAN HOGS:

   The lean hog complex hasn't performed as strong as it had hoped for this 
week from a technical sense, but still packers are chasing the cash market. 
It's likely packers are aggressively running after hogs as they want to get 
their inventory stocked before the Christmas and New Year holidays. With 
holiday buying on the verge of being done, pork cutouts could face more 
pushback as retailers coast into the New Year. From a demand sense, a strong 
export report could help the market tremendously as it would help move 
front-end product and give the market a much-needed gust of support. December 
lean hogs are up $0.02 at $73.45, February lean hogs are down $0.42 at $79.55 
and April lean hogs are down $0.55 at $84.70.

   The projected CME Lean Hog Index for 11/30/2021 is up $0.23 at $70.27, and 
the actual index for 11/29/2021 is down $0.56 at $70.04. Hog prices are higher 
on the National Direct Morning Hog Report, up $0.26 with a weighted average of 
$55.68, ranging from $54.00 to $59.00 on 4,968 head and a five-day rolling 
average of $55.29. Pork cutouts total 195.31 loads with 160.89 loads of pork 
cuts and 34.42 loads of trim. Pork cutout values: down $1.18, $85.52.

   **

   In planning for the holiday season and what may come with the new year, make 
plans to attend the 2021 DTN Ag Summit, December 5-7, in Chicago! Visit 
http://www.dtn.com/agsummit for more details about the summit and to register.

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




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