GENERAL COMMENTS
Cash cattle activity was at a standstill Tuesday. Showlists were mixed as both sides enter the new year. Overall, cattle numbers seem to remain generally steady with last week, although showlists appear to be smaller in Kansas and larger in other states. Bids and asking prices are still undeveloped and may remain that way until midweek or later. This could create another round of late Friday trade, and limit potential cattle moved during early January. According to the closing report, the national hog base is $0.28 higher compared with the prior day settlement ($54.00-$60.50) weighted average $59.02. Corn futures moved higher in light activity. March futures were 2 cents higher Tuesday. The Dow Jones Index is 93 points higher with the Nasdaq up 102 points.
LIVE CATTLE
Live cattle futures were well-supported Tuesday with triple-digit gains ($1.42 to $1.92 higher). Traders aggressively and quickly swept through the live cattle complex early Tuesday morning as they returned from the long holiday weekend. The first trading session of 2018 saw triple-digit gains in all contracts with traders moving nearby contracts well above December highs. Focus is on potential follow-through support that is likely to develop in the next couple of weeks. Beef cut-outs: higher, $3.59 higher (select, $196.57) and up $2.24 (choice, $205.14) with good demand and moderate offerings (45 loads of choice cuts, 30 loads of select cuts, 15 load of trimmings, 13 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL:
Steady to $2 higher. Activity in the cash cattle trade remains at a standstill with showlist distribution and inventory taking the main order of business. Although it spending is expected to firm through the week, trade is not expected to develop until late in the week.
FEEDER CATTLE:
Sharp, triple-digit gains moved even higher at closing bell with aggressive buyer support through the entire cattle market ($2.07 to $4.20 higher). Strong upward market support was seen through the entire session with traders holding triple-digit gains most of the day Tuesday. But, even more aggressive support flooded the market late in the trading day, which pushed prices in March contracts $4.20 per cwt higher with markets closing at $146.87 per cwt. The strong support is expected to help keep markets firm through most of the week, but aggressive gains typically bring more market volatility, and could open the door to wide market shifts over the next several trading sessions. CME cash feeder index for 1/1 is $155.33 down $0.69.
LEAN HOGS:
Hog futures wandered in a mixed trading range through the entire first trading session of the new year. This kept nearby contracts under pressure, although light to moderate support trickled into the rest of the complex ($1.05 lower to $0.37 higher). Moderate support in hog market and pork fundamentals and aggressive buyer activity in cattle trade was not enough to bring about increased buyer support in all contracts, although traders seemed to focus more on the underlying market support through most of the trading session, despite the pullback in nearby prices at closing bell. February and April futures posted strong market pressure, while the rest of the complex closed mixed to mostly higher in a narrow trading range. The bitterly cold temperatures in many areas of the country are affecting overall activity from cash markets to the futures trade. Carcass values trickled higher as support in all other primals offset a $4.12 per cwt loss in the loin market Tuesday. Pork cut-out: $78.33 up $0.11. CME cash lean index for 12/28 $61.72, up $0.14. DTN Projected lean index for 12/29 $62.23 up $0.51.
WEDNESDAY'S CASH HOG CALL:
Steady to $1 higher. Follow-through support is likely to develop in cash hog markets early Wednesday with plants looking to regain a normal work week schedule and push additional hogs through in order to make up for the holidays. Most bids are expected to remain steady to firm early Wednesday morning. Plant runs are expected to be at 465,000 Wednesday. Saturday runs are expected to be at 385,000 head.
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