Even though cash cattle traded higher last week, live and feeder cattle futures closed lower for the week. Northern dressed cattle traded $2.00 higher with Southern live cattle trading steady to $2.00 higher. Traders did not get too excited over the higher cash but remained cautious over the upside price potential. Boxed beef prices were mixed with choice up $4.20 and down select down $0.37. Packers will try their best to improve margins and may continue to slow the slaughter pace to accomplish that task. Cattle imports from Mexico remain restricted, which may continue to provide support as long as that remains in place. It is uncertain how many cattle packers have purchased for deferred delivery but one major packer had already purchased some cattle for delivery during the last week of December. The fund traders added 5,528 long futures positions in live cattle over the week ended Dec. 3, increasing their net-long positions to 123,878 contracts. They added 2,054 futures positions bringing their net-long position in feeder cattle to 17,521.
Steady to Higher Cash May Continue
Cattle imports from Mexico remaining restricted is likely to keep the cash market steady to higher. This supply restriction has the potential to further tighten the supply situation in the long run. Traders are closely monitoring this situation as it could have a significant impact on the cattle market.There is a sense of uncertainty among traders regarding the future direction of the cash market. However, the ongoing restriction on cattle imports from Mexico provides a certain level of support and stability.Cattle Futures May Be Rolling Over
With the end of the year approaching, there is a possibility of further liquidation in cattle futures. This could lead to a rolling over of the futures market, with more downside risk than upside potential. Traders are cautious about this situation and are closely observing the market trends.The current market conditions suggest that cattle futures may be entering a phase of consolidation or correction. The uncertainty surrounding the end-of-year period and the potential for liquidation is causing some traders to adopt a more conservative approach.Choice Boxed Beef Prices Continue to Push Higher
The choice boxed beef prices have been on an upward trend, moving the choice/select spread to a wide $35.31. This indicates strong demand in the market for choice beef. Traders are taking note of this trend and are adjusting their strategies accordingly.The continuous increase in choice boxed beef prices is a positive sign for the beef industry. It reflects the growing demand for high-quality beef and provides an opportunity for producers to capitalize on this trend.Hog Traders Continue to Trade the Trend
Hog traders are actively trading the trend and are not hesitant to add to their long positions to support it. This shows their confidence in the hog market and their belief that the upward trend will continue.The trading behavior of hog traders indicates a positive sentiment in the market. They are willing to take risks and invest in the hog market, which is likely to have a positive impact on the market dynamics.The Large Drop in Cash Hogs Friday
The large drop in cash hogs on Friday has put some pressure on the market. Traders are cautious about adding to their long positions in the wake of this drop.The market is likely to be affected by the Friday's drop in cash hogs. Traders will need to carefully assess the situation and make informed decisions regarding their positions.For our next livestock update, please visit our Midday Livestock comments between 11 a.m. and noon CST. Also, stay tuned to our Quick Takes throughout the day for periodic updates on the futures markets.**As a new administration prepares to take office, farmers are preparing for the next growing season. In this year’s DTN Ag Summit, we’ll examine the state of national farm policy, including timing on a farm bill, makeup of the ag committees and new leadership at USDA. A few of the winners of this year’s America’s Best Farmers and Ranchers award share what they’ve learned from selling directly to consumers, and the DTN markets and weather team will offer their perspective on what’s in store for 2025.The DTN Ag Summit is scheduled for Dec. 5-6, 2024. Use this link to sign up: https://dtn.link/…Robin Schmahl can be reached at rschmahl@agdairy.com
