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February Lean Hogs opened lower and traded to the low of the day at 84.20. It turned higher and worked higher the rest of the session to the high at 85.75. It settled near the high at 85.675. The rally took price above resistance at 85.325 as Hogs were able to ignore weaker export sales and declining cutout and cash indices to continue to narrow the discount futures have to the Lean Hog Index. The higher price is also a new high on the continuous chart. This puts resistance at 87.10 and the rising 200-DMA now at 87.25 in traders’ crosshairs. The bullishness comes about as the US Dollar continues to rise putting exports in danger of potentially continued declines as our partners currency devalues versus the Dollar. The cutout continued its decline on Friday and the cash index also looks lower for Monday. Traders seem to be paying more attention to the unseasonally weaker slaughter numbers as the USDA’s Hogs and pigs report estimates for heavier weight hogs hasn’t materialized in larger slaughter numbers, in my opinion. I think they are waiting for surging cutouts and higher cash, which hasn’t happened. Maybe it’s the late Thanksgiving holiday that they may think lends support to hogs. We still have a scenario that could lead to lower hog prices as demand for pork usually weakens after Thanksgiving going into New Year’s. We’ll see!... If price breaks down from the key level at 85.325, it could test support at 83.325. Support then comes in at the rising 8-DMA now at 82.75 and then the rising 21-DMA now at 82.35. If price can get hold settlement, it could test resistance at 87.10 and then the 200-DMA.

The Pork Cutout Index decreased and is at 95.17 as of 11/21/2024. 

The Lean Hog Index decreased and is at 87.44 as of 11/20/2024.

Estimated Slaughter for Friday is 485,000, which is above last week’s 484,000 and last year’s 448,900. Saturday’s slaughter is expected to be 138,000, which is below last week’s 230,000 and last year’s 349,933. The estimated slaughter for the week (so far) is 2,565,000, which is below last week’s 2,638,000 and above last year’s 2,221,365.

January Feeder Cattle opened lower and down ticked to the low at 253.15. Price surged from here to the session high at 255.375. It pulled back hard down to 253.80 before grinding higher to settle at 254.30. The rally took price above resistance at 254.30 and nearby major trendline resistance (in my opinion) at 254.725. The pullback and settlement were right at resistance and below the trendline as price weakened at the end of the session in front of the Cattle on Feed Report. Traders look like they are getting more excited over the higher prices being paid for lighter weight cattle and expectations that the numbers will be going down as we enter 2025. The Feeder Index has been climbing and with the higher prices paid for feeder weight cattle this week, the index could continue to work higher. We’ll see!... If price retakes the trendline resistance, it could move towards resistance at 257.925. A breakdown from settlement could see a test of support at 252.30. Support then comes in at 251.50.

The Feeder Cattle Index increased and is at 254.54 as of 11/21/2024. 

February Live Cattle opened higher and dipped to an early low before racing to the high of the day at 189.05. It reversed course and took out the early low, trading down to the session low at 187.375. The market recovered off the low and settled at 188.20. The rally took price to a new high for the recent up move on the continuous chart but was unable to exceed the previous high when the December contract was the lead contract at 189.80. This was a good day for bulls however as settlement was above strong trendline resistance (in my opinion) at 187.775 and the key level at 187.725. This rally is even more impressive as it was done in front of the cattle on feed report which came out after the close of business and a cutout that is on the lower end of its recent range. I think the impressive moves in the feeder cattle cash market has also helped the live cattle market as Feeder futures have been on strong up swing and has led the way higher in my opinion. Packers up the slaughter this week in front of next week’s Thanksgiving holiday when we lose a day of slaughter. The late holiday shortens the seasonal for the Christmas and New Year’s holidays’ which could make the packers more aggressive going forward with the shorter period between holidays. The cash market is also going to average out higher than last week, which keeps packers in a bind as they can’t get cutouts moving higher and I believe they need cattle because I think they have a lot of orders to fill from retailer purchases with time. If we get some wintry weather which cuts back on the carcass weights they could be in even more trouble. Can the producer get control of the cash Market? We’ll see!... If price can’t hold settlement, it could test support at 187.725. Support then comes in at the rising 8-DMA now at 186.225 and then 185. 75. If settlement holds, we could see price test resistance at previous high at 189.80. Resistance is nearby at 190.075. Cattle on Feed is shown below.

Boxed beef cutouts were mixed as choice cutouts increased 0.62 to 307.41 and select decreased 0.85 to 272.07. The choice/ select spread widened and is at 35.34 and the load count was 98.

Friday’s estimated slaughter is 117,000, which is below last week’s 120,000 and above last year’s 112,897. Saturday slaughter is expected to be 18,000, which is above last week’s 3,000 and below last year’s 37,523. The estimated total for the week (so far) is 631,000, which is above last week’s 606,000 and last year’s 534,488.

The USDA report LM_Ct131 states:  So far for Friday, negotiated cash trade has been slow on light to moderate demand in all regions. In the Texas Panhandle the last reported market was on Thursday at 186.00, live FOB. In Kansas, compared to the last reported market live FOB purchases traded 1.00 higher at 187.00. In Nebraska live FOB purchases traded 2.00-3.00 higher from 187.00-188.00, when compared to last week. The last reported dressed delivered purchase market was Thursday at 290.00. In the Western Cornbelt, compared to the last reported market on Thursday, live FOB purchases traded steady to 2.00 higher from 186.00-188.00. Last week dressed delivered purchases traded from 290.00-300.00.

The USDA is indicating cash trades for live cattle from 183.00 – 188.00 and 288.00 – 300.00 on a dressed basis (so far).

United States Cattle on Feed Up Slightly 

Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 12.0 million head on November 1, 2024. The inventory was slightly above November 1, 2023. 

Placements in feedlots during October totaled 2.29 million head, 5 percent above 2023. Net placements were 2.23 million head. During October, placements of cattle and calves weighing less than 600 pounds were 585,000 head, 600-699 pounds were 480,000 head, 700-799 pounds were 490,000 head, 800-899 pounds were 436,000 head, 900-999 pounds were 215,000 head, and 1,000 pounds and greater were 80,000 head. 

Marketings of fed cattle during October totaled 1.85 million head, 5 percent above 2023. 

Other disappearance totaled 55,000 head during October, unchanged from 2023.

**Call me for a free consultation for a marketing plan regarding your livestock needs.**

Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

Direct: 312.957.4163

888.391.7894

Fax: 312.256.0109

[email protected]

www.walshtrading.com

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