Before we go off into the weeds on tomorrow's report expectations, I want to bring some light to the pork cutout. I'm starting to notice some "slipage" in product pricing, which could be a short term fluke, or could become a pattern. I don't like the trend in the bellies or hams, so I'm getting a little on edge. If you lifted your hedges on that possible "V bottom," you're already ahead of the market by $6. Use this rally to set a floor on April hogs. LRP is preferred given basis seasonals, but a put works too if you have to. I'm not in a freak out sell it all to zero state of mind, but I don't like this week's action as much as last week's.

Now on to your favorite time of the month- Report Day. The following are only estimates, so who knows what DC will throw at us tomorrow.

- Cattle on Feed 98% compared to Nov 1st 2024

- Placements 92% compared to November last year

- Marketings 88% compared to November last year

— 1 less day of marketings compared to last November

As far as my thoughts on the report, I don't like that we could see a report showing more placements than marketings, but do we even believe their numbers anyway? Many traders take the next two weeks off, so this report might do absolutely nothing to the markets, or the volatility could be extreme with fewer traders. Flip your coin, because again, the USDA's guesses against what the Futures Markets have priced in is something to watch, but also the USDA's guesses against the estimates listed above. I'm going to take the stance that Cash and Kills will matter more, and this week hasn't been a ball of fire in the cash space and not expecting a huge kill to finish the month either.

-Fat cattle kill at 123,000 vs 123,000 a week ago and 121,000 a year ago

-Choice boxes up 1.19 to $357.28 and select down 2.46 to $343.97 for a spread of 13.31 on 89 loads

-CME feeder index(Feeder LRP Settlement) for 12/17 came in at $350.05

-Fed Cattle LRP’s ending last week settled at $227.90

-Hog kill at 495,000 vs 494,000 a week ago and 485,000 a year ago.

-Afternoon Pork reported down 1.11 at $97.43 on 183 loads

-CME lean hog index on 12/16 reported at 83.87

-CME pork cutout index on 12/17 reported at 98.61

-LRP’s ending 12/18 settled at approximately $83.88

As we head into the official start of winter, the key takeaway is that this year’s LRC is beginning to reveal its structure, even as important details continue to sharpen. Wind, temperature swings, and shifting storm tracks are all part of the same evolving pattern, and the signals we’re tracking now will become increasingly actionable in the weeks ahead.

The GFS model shows a stronger warm up with 71 degrees in Kansas City on Christmas Day. Let’s see how these models trend.

There is still Arctic air on the North America side of the Northern Hemisphere:

Take a look at the latest data for the California storm. At this point, the model is likely overdoing the extreme end of the precipitation forecast, including indications of up to two feet of rain now through the 25th. While that specific amount is unlikely, it highlights the potential for a high-impact system, especially with an elevated flooding risk in the foothills of the Sierra Nevada.

This is a situation we’ll continue to monitor closely as the pattern becomes better defined and the guidance comes into better agreement.

It’s important to note that the LRC is still coming into focus. As we move deeper into the winter pattern, the signal sharpens, and within the next couple of weeks the model becomes significantly more accurate for planning and decision-making.

What kind of bug hates Christmas?

A bah humbug