Last week I went into detail how the holidays affect the cattle market, and how the complex doesn't see a lot of action from now until the new year. And, believe it or not, the market has already slumped into the holiday daze I warned you about.
It's hard for the market to do much trading when every sector of the market is thinly traded during the holidays. The futures complex barely sees any attention from traders as everyone runs around with their last-minute holiday shopping. The cash cattle market doesn't see much interest as packers have two weeks ahead of them of holiday-shortened kills. The feeder cattle market feels left behind as sale barns shut their doors until after the new year, as no one wants to be running up and down the road with loads full of calves on Christmas Eve.
We started to see a lackadaisical attitude take over the livestock complex starting last week. Throughout the week, the cattle contracts couldn't seem to summon any meaningful support, and the hog contracts only rallied upon seeing a bullish export report on Thursday. Last week, the cash cattle market had a lousy week where only 48,733 head traded. Of that, 62% (30,111 head) were committed for the nearby delivery, while the remaining 38% (18,622 head) were committed for the deferred delivery. So, when analyzing how the market will fare this week -- the cards unfortunately fall in favor of packer's position and they'll likely be able to move the market down another $1, if not $2.
And, as odd as it may seem, the livestock complex has a lot to absorb since USDA is release both its Cattle on Feed report and Quarterly Hogs and Pigs report are going to be shared the day before Christmas Eve. Neither report is expected to gravely affect the marketplace because of the timing. Placements are anticipated to be lower on the COF report, and given the reduction in hog numbers in recent reports, Thursday's report won't likely be as drastic in herd size. So, before heading out to fully enjoy the holiday, make sure you glance at both of those reports ahead of the weekend.
Merry Christmas, folks!
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
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