Cattle:

Stable Cash Cattle: Trades have been confirmed in the North. Dressed sales of $289 - 290 were noted, same as last week. Live based bids, no confirmed trades, are at $184 and $185. Futures are now suggesting cash cattle will hold at $185 through December. Current bids for early 2025 pricing are +2% to +3% from prior year. Given expectation of a light year over year supply decline ahead futures have a very light demand discount priced in.

Downtrend in Beef Remains: Choice beef was hit -20.62 over 20 days. But Monday and Tuesday's trade was +3.94 and +1.51. A similar one week bounce in a general downtrend was noted last year at this time. This morning's trade was back to -0.48.

Cattle on Feed: The next monthly COF report will be out Friday at 2 pm Central. The Reuters news wire poll suggests the trade sees October feedlot placements +3.8% from last year (ALDL +2.8%). Our 2.242 million head estimate would be the largest October inflow in three years. That is not out of line. When we are projected fed cattle supplies for November on out we look at placements since March. March - October placements as a whole will have run -1.9%. This gives us an idea of November - part of Q2 fed cattle supplies. The narrative of a slow decline in offerings through first half of 2025 remains in place. October outflows, marketings, are expected +5.2% from the prior year (ALDL +5.0%). This is primarily due to a change in the days on the calendar vs. last year and not some dramatic marketing increase. November 1 On Feed is expected -0.1% from last year (ALDL -0.1%).

Let's give a slightly positive spin on Cattle on Feed. The most recent four week period has seen steer/heifer slaughter +0.6% from last year. The Cattle on Feed dataset would suggest those who have fed for +120 days or more, a rough estimate of market ready cattle, at -2.5% from last year. The long term placement numbers would suggest a smooth decline in offerings. We are right at the point where we'll see that next drop in supply happen.

Last week's cattle slaughter, feedlot + cow/bull, totaled 606,000 head. This was under our morning view of 617,000. This run was a bit low at -5.2% from last year. The prior six weeks averaged -2.9%. Dressed steer/heifer weights are running +3.2% year over year.

USDA's Supply view: USDA's 11/8 monthly supply/demand report was negative for beef. They currently have beef production in this Q4 period -0.1% year/year. They have been reigning in their prior bullish view for 2025. On the most recent report they went from -4.0% year over year to now -2.6%.

Futures Seasonal: Live cattle futures generally rally from fall into spring. But there is a well-known, and quite consistent, short term break in this time. February futures generally post a sharp break from 11/26 - 12/9. On the April it runs 11/23 - 12/9. Given our view of light supply declines compared with last year showing into Q1 and Q2 this may be a significant buying opportunity if it happens.

Fed cattle futures retraced some of its recent decline. February, the dominant contract, has filled its open upside gap.

Recent moisture in the Plains has helped support feeder prices for two weeks. Monday's Oklahoma City run has seen an $8 advancement over this period. Seasonally, this part of the market is typically falling into Q1. Prices are currently +15% from last year. If this rebound is only from the recent moisture recharge then stability may be seen soon. At this time we are not suggesting expansion, withholding heifers from the feedlot, is happening.

Feeder cattle futures pushed to another high for its uptrend. This is the best price since July 31 for the January…Rich Nelson

Hogs: 

Cash hogs have showed lower trade for five days. But the declines are only moderate. December futures have it priced in.

Lower Cash Hogs: Five days of cash hog loses have been noted. The average of these five days is -0.45 per day. Tuesday's trade, in that five day stretch, was -0.29. The Lean Hog Index is 87.83.

December Futures Discount: We are nearing the coming December 13 expiration of December futures. With 17 sessions left the market is implying cash hogs will post daily losses of -0.44. This is a reasonable view.

Lower Cash Pork: Wholesale pork fell -9.33 over the past 11 sessions. Today's morning report was +2.29.

Chinese Pork Imports Remain Low: This week China's government reported October pork imports of 90,000 tonnes. This is the same bottom of the barrel import numbers that have been seen in 11 of the past 13 months. China reports its January - October imports at 890,000 tonnes, -35% from one year ago. There is a world of difference in their buying since the monthly peak of 460,000 tonnes in March 2021.

USDA's Pork Supply View: USDA lightly trimmed their 2024 and 2025 pork production views on the most recent supply/demand report. For 2024 production they see 27.858  billion lbs., +2.0% year/year. For this Q4 period we are in they are +1.8%. For 2025 they suggest production of 28.400 billion, +1.9% from 2024.

Pressure on Futures Seasonally: February and April futures typically end their seasonal uptrends with a sharp break 11/20 - 12/17. On the June it is a short lived 12/1 - 12/7 move. The current peak for February and April futures is 11/12. If seasonals hold, futures are just getting started on a downtrend (different than our fundamentally neutral view).

Chart action for futures was negative in recent days. Since the new contract high that was rejected last week, this market has found acceptance at lower pricing. February has broken its general uptrend...Rich Nelson

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