Wednesday Closing Livestock Market Summary - Firm Gains Develop in Hogs

GENERAL COMMENTS

Cash cattle trade remains light with a few token bids developing in the North at $122 per cwt live, while dressed bids are $193 and higher. Active trade is expected to hold out until the end of the week.

The Fed Cattle Exchange Auction today listed a total of 494 head, with 0 actually sold, 356 head listed as unsold, and 138 head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 356 total head, with 0 head sold, 356 head unsold, 0 head listed as PO; Nebraska -- no cattle reported; Texas 138 total head, with 0 head sold, 0 head unsold, and 138 head listed as PO ($123.75); Colorado -- no cattle reported; Iowa -- no cattle reported; other states -- no cattle reported. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 494 head total, 0 head sold; 1-17 day delivery -- no cattle reported; 10-17 day delivery -- no cattle reported; 17-30 day delivery -- no cattle reported.

According to the closing report, the national hog base is $0.71 higher compared with the prior day settlement ($62.00-$71.75) weighted average $69.54. The corn futures are higher in light activity. March futures were 5 cents higher Wednesday. The Dow Jones Index is 41 points higher with the Nasdaq down 45 points.

LIVE CATTLE

Strong buyer support moved into front-month futures, sparking follow-through support in most contracts (steady to $0.70 higher). The ability to spark some increased trade volume through the complex has helped add even more firmness to the entire market. This has pushed front-month futures above $125 per cwt, allowing for potential increased support over the near future. Beef cut-outs: higher, $0.69 higher (select, $200.85) and up $1.14 (choice, $207.99) with good demand and moderate offerings (72 loads of choice cuts, 27 loads of select cuts, 13 load of trimmings, 12 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

Steady to $2 higher. Cattle markets remain sluggish going into Thursday morning with bids expected to redevelop in the same range as Wednesday. This may limit activity until the end of the week, although packer interest is expected to increase through the day Thursday.

FEEDER CATTLE:

Feeder cattle futures moved lower in light trade as traders tried to back away from previous gains ($0.42 to $0.57 lower). The inability to follow the gains in the rest of the livestock market has created some underlying market shifts. This could bring even more weakness to the market through the end of the week. CME cash feeder index for 1/22 is $147.88 up $0.34.

LEAN HOGS:

Strong gains quickly developed across the complex with prices moving back from previous pressure ($0.37 to $1.05 higher). April futures led the market higher with increased underlying support. The focus on increased overall buyer interest may continue to draw commercials to the market. Carcass values shifted lower with moderate to firm pressure in most primals. Pork cut-out: $82.03 down $1.00. CME cash lean index for 1/22 $73.39 down $0.01. DTN Projected lean index for 1/23 $73.80 up $0.41.

THURSDAY'S CASH HOG CALL:

Steady to $1 lower. Now that packers have gotten back in the swing of things following the holiday storms which reduced early week packer schedules, the overall tone of the market is expected to remain steady to weak. Most bids are expected to be 50 cents per cwt lower. Packer schedules Thursday are slated for 465,000 head with a total of 137,000 expected Saturday.