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DTN Midday Livestock Comments          11/30 11:39

   New Variant Concerns Send Bulls Retreating 

   The omicron strain of COVID is taking its toll on the entire marketplace, 
including the livestock contracts. 

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   I know it's the absolute last thing you want to spend time talking about, 
but the outbreak of the omicron COVID variant has sent the market tumbling 
lower as vaccines are less effective on this strain and it could take months 
before a new vaccine is developed. From the corn market to the NASDAQ to the 
feeder cattle contracts, the entire marketplace is lower -- worried about what 
this may mean for the marketplace and the U.S. economy. March corn is down 17 
1/4 cents per bushel and January soybean meal is down $0.40. The Dow Jones 
Industrial Average is down 663.88 points and NASDAQ is down 322.81 points.

   LIVE CATTLE:

   As if the struggles of a scant labor force and a broken supply chain weren't 
problematic enough, the pressure of the unknown surrounding the omicron variant 
is having a toll on the live cattle contracts. December live cattle are down 
$1.10 at $135.75, February live cattle are down $1.72 at $137.57 and April live 
cattle are down $1.72 at $140.80. Thankfully the market hasn't seen any doggish 
attitudes surround the cash cattle market thus far, but it's still early in the 
week. There are a few bids being offered in Texas at $138, but the South is 
asking $143 to $145, and the North has yet to disclose their asking prices. 
Trade isn't expected to really shake loose until midday Wednesday, or 
potentially even later in the week.

   Boxed beef prices are lower: choice down $1.05 ($276.53) and select down 
$0.80 ($261.22) with a movement of 87 loads (48.54 loads of choice, 12.74 loads 
of select, 18.69 loads of trim and 7.28 loads of ground beef).

   FEEDER CATTLE:

   Feeder cattle contracts are closely watching the cash cattle market to see 
how it's going (or not going) to be affected by the new COVID strain, as they 
would love to rally as the corn market tumbles 16 to 18 cents lower in fear of 
the virus. But without the fundamental support of the cash market, the complex 
is trading modestly lower -- not seeming in a hurry to decide what exactly its 
position is yet. January feeders are down $1.07 at $164.67, March feeders are 
down $0.55 at $166.00 and April feeders are down $0.37 at $168.20. It will be 
interesting to see how sale barns fare with this new news buzzing throughout 
the marketplace. It's most likely the markets still see strong demand as the 
live cattle futures still show excellent rewards in the months to come.

   LEAN HOGS:

   The lean hog complex would most likely be rallying as pork cutout values are 
higher again and the cash market is continuing to be supported. But the futures 
aren't going to get overly confident without knowing how vast the toll of this 
new strain is going to be. December lean hogs are down $0.07 at $72.32, 
February lean hogs are down $1.87 at $79.05 and April lean hogs are down $1.45 
at $84.45. If cutouts can champion a higher close Tuesday afternoon, then 
packers could continue to support the cash market in the days to come as they 
are seeing strong demand even though holiday buying is nearing its end.

   The projected CME Lean Hog Index for 11/29/2021 is down $0.56 at $70.04, and 
the actual index for 11/26/2021 is down $1.03 at $70.60. Hog prices are higher 
on the National Direct Morning Hog Report, up $0.32 with a weighted average of 
$55.42, ranging from $55.00 to $58.00 on 4,885 head and a five-day rolling 
average of $55.13. Pork cutouts total 215.28 loads with 177.89 loads of pork 
cuts and 37.40 loads of trim. Pork cutout values: up $1.82, $89.53.

   **

   In planning for the holiday season and what may come with the new year, make 
plans to attend the 2021 DTN Ag Summit, December 5-7, in Chicago! Visit 
http://www.dtn.com/agsummit for more details about the summit and to register.

   ShayLe Stewart can be reached shayle.stewart@dtn.com




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