Hogs
Price action: December lean hog futures fell $0.775 to $67.825, nearer the daily low, hit a contract low and for the week down $2.30.
5-day outlook: The hog futures market saw technical selling pressure today amid firmly bearish charts, including today’s bearish weekly low close in December futures. Futures prices remain trapped in a downtrend on the daily bar chart. The CME cash hog index and cash hog prices continue to trend down, also.
The latest CME lean hog index is down 50 cents to $78.41. Monday’s projected CME index price is down another 80 cents at $77.61. The national direct five-day rolling average cash hog price quote for today is $75.01. The USDA noon pork report today showed cutout value was up $0.54 at $80.18, led by gains in bellies. Movement at midday was good at 201.55 loads.
30-day outlook: Pork cutout values slipped to the lowest levels since early 2023 earlier in the month on soft wholesale pork demand. Ample frozen U.S. pork stocks and cheaper alternative proteins continue to overshadow pork at the meat counter. Heavier carcass weights have offset much of the year-over year decline in hog inventories. Managed money remains heavily short (on one side of the boat), which could fuel a short-covering bounce if product values firm. However, a sustained recovery depends on clearer evidence that smaller supplies are tightening pork production.
90-day outlook: Holiday demand for hams from grocers may be supportive for lean hog futures, while frozen pork stocks, export sales and the December USDA Hogs & Pigs report are fundamentals to digest into the end of the year.
What to do: Get current with feed coverage.
Hedgers: You currently have all risk in the cash market.
Feed needs: You are now hand to mouth for corn-for-feed and soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.
Cattle
Price action: December live cattle futures rose $3.50 to $227.05, near the session high, hit a two-month high and for the week up $5.575. November feeder cattle futures gained $7.075 to $341.95, near the session high, hit a nearly three-month high and for the week up $10.80.
5-day outlook: The cattle futures markets saw serious technical buying kick in to end the trading week, as the chart-based specs know the near-term price uptrends are the bulls’ friends in both markets. The big drop in corn futures prices following a bearish WASDE report from USDA also boosted feeder cattle futures today.
USDA at midday today reported more active cash cattle trading late this week, with steers averaging $219.10 and heifers $219.91. The agency reported average cash cattle trading last week at $219.80. The noon report today showed mixed boxed beef prices, with Choice grade down $0.15 at $374.70 and Select grade up $4.29 at $356.02. Movement at midday was 91 loads. The Choice-Select spread is presently plus $18.68.
30-day outlook: Cattle futures markets have been supported by tighter supplies of market-ready animals and steady packer demand. Boxed beef values have edged higher as retailers restocked ahead of seasonal promotions. Limited placements in recent months and improved pasture conditions have slowed the flow of cattle into feedyards, keeping nearby supplies snug.
90-day outlook: Longer-term supply and demand fundamentals for the cattle and beef markets remain solid. The latest USDA monthly cattle-on-feed report showed August placements and marketings at record lows. The COF report suggested a long cycle favors the bulls in the coming months: a small U.S. beef cow herd, years of drought in the Plains and forced liquidation and a tight calf crop.
What to do: You are now hand to mouth on all corn-for-feed and soymeal needs. Be prepared to make additional purchases if value levels present themselves.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You are now hand to mouth for corn-for-feed and soymeal for feed needs. Be prepared to make purchases if value prices arise from fall harvest pressure.