Mixed trade is seen late Wednesday morning following a pullback from early-market support. Live cattle futures are holding moderate weakness although the tone of the market remains weak. Triple digit losses have flooded into hog trade as the softness in pork values gained the attention of nearby traders. Corn prices are mixed in light trade. March corn futures are 1/4 cent higher Tuesday. Stock markets are mixed in light trade. The Dow Jones is 3 points higher while Nasdaq is down 18 points.
LIVE CATTLE:
Moderate to strong pressure is seen in live cattle futures with traders focusing on the triple digit losses that have quickly moved through lean hog trade. There continues to be increased market pressure developing across the complex as traders are holding nearby contracts 50 to 90 cents per cwt lower. The overall lack of support in the complex continues to create caution through the week given pressure in cash trade, although some commercial buying support is expected to remain close to the market in the event that current pressure subsides. Cash cattle activity remains quiet Wednesday morning with bids unavailable at this point. The development of light to moderate trade over the last couple of days has likely cleared most business out of the market, although some clean-up activity is expected. But prices are not likely to shift significantly over the near future. The Fed Cattle Exchange Auction today listed a total of 711 head, with 401 actually sold, 310 head listed as unsold, and 0 head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 529 total head, with 401 head sold at $119.00, 128 head unsold, 0 head listed as PO; NE 60 total head, with 0 head sold, 60 head unsold, and 0 head listed as PO; TX 122 total head, with 0 head sold, 122 head unsold, and 0 head listed as PO; CO -- no cattle reported; IA -- no cattle reported; other states -- no cattle reported. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 651 head total, 401 head sold, with a weighted average price of $119.00; 1-17 day delivery -- no cattle reported; 10-17 day delivery -- 60 head total, 0 head sold; 17-30 day delivery -- no cattle reported. Boxed Beef cut-outs at midday are higher, $0.57 higher (select) and up $0.36 per cwt (choice) with light movement of 64 total loads reported (34 loads of choice cuts, 12 loads of select cuts, 5 loads of trimmings, 13 loads of ground beef).
FEEDER CATTLE:
Surrounding market pressure in live cattle and lean hog trade midday Wednesday has eroded early-market support in the feeder cattle trade. Prices are mixed in a moderate range, although most contracts continue to hold light to moderate support at midday. The concern that the lower cash cattle trade and inability to spark strong beef market support could add follow through pressure to the entire complex over the next several days is causing softness, especially in front-month futures.
LEAN HOGS:
Despite spending most of the morning in a narrowly mixed trading range, strong pressure quickly swept through lean hog trade late morning. This is keeping prices in nearby contracts $1 to $1.40 per cwt lower at midday and creating some additional longer-term concerns for the entire market. Pressure in pork values seemed to be the main driver of the lower-moving futures trade, although trade remains sluggish through most of the complex and is keeping prices from moving back higher during the session. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $1.52 at $69.08 per cwt with the range from $61.00 to $70.50 on 10,060 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is up $1.35 at $69.18 per cwt with the range from $61.00 to $70.50 on 3,710 head reported sold. The National Pork Plant Report posted 155 loads selling with carcass values falling $0.50 per cwt. Lean hog index for 1/08 is at $66.37 up $0.72 with a projected two-day index of $67.28, up $0.91.
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