GENERAL COMMENTS
Cash cattle trade is most likely to be pushed into Friday following no additional direction through the day Thursday. Cash bids have continued to redevelop at the same level as seen earlier in the week with live cattle bids at $124 per cwt while dressed cattle are bid at $196 to $198 per cwt. This is well below asking prices (which have not budged through the week either) at $129 to $130 live basis and $203 to $204 per cwt dressed basis. The standoff could continue until late Friday. According to the closing report, the national hog base is $1.26 per cwt lower with an average price of $69.59 per cwt (trading range: $62-$73.50). Corn futures are higher in light activity. March futures were 1/2 cent higher Thursday. The Dow Jones Index is 1029 points lower with the Nasdaq down 164 points.
LIVE CATTLE
Mixed trade was seen late Thursday afternoon following strong market gains seen earlier in the day ($0.52 lower to $0.17 higher). Strong triple-digit gains quickly developed through the first half of trade Thursday, but most contracts pulled back from early support and moved slightly lower at closing bell. The front-month February futures contract was the only nearby contract to hold a gain into the end of the session, although traders seem to be focusing on the potential for market stability at the end of the week. Beef cut-outs: mixed, $0.65 higher (select, $203.79) and down $0.84 (choice, $208.53) with light demand and offerings (71 loads of choice cuts, 20 loads of select cuts, 7 load of trimmings, 9 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL:
Steady. Going into the end of the week, packers and feeders continue to be unwavering as they are unwilling to move from their previous positions with asking prices and bids holding firm late Thursday. This is likely to allow for late-week activity developing in the market as packers still need to make sizable purchases, and feeders are unwilling to limit expectations at this point.
FEEDER CATTLE:
Prices turned lower through the end of the session Thursday, but early support may have limited the overall pressure across the complex ($0.02 to $1.05 lower). Even though prices turned lower at the end of the trading session, wide trading ranges were seen through the complex as front-month March contracts held a $3-per-cwt trading range Thursday. Prices ended $1.05 per cwt lower, as the overall lack of buyer support seemed to create even more uncertainty in the market at the end of the week. CME cash feeder index for 2/7 is $148.08, down $0.08.
LEAN HOGS:
Mixed trade is seen through the Thursday complex with prices focusing on market stability through the end of the week ($0.45 lower to $0.25 higher). Sharp losses earlier in the week have created some market stability Thursday with traders holding to a moderate range. Most contracts were steady to 25 cents per cwt higher as narrow price shifts developed in all contracts. The focus on short-covering through the end of the week may keep some additional buyer support moving into the markets, although the tone of the market remains weak. Carcass values continue to slip lower under pressure. Although primal cuts were maintained in a much more normal trading range, the strong pressure in most pork cuts seemed to limit the focus on moving the market higher any time soon. Pork cut-out: $76.92 down $0.42. CME cash lean index for 2/6 $75.38 up $0.54. DTN Projected lean index for 2/7 $75.63 up $0.25.
FRIDAY'S CASH HOG CALL:
Steady to $2 lower. Continued pressure is expected to be seen early Friday morning despite the stability seen in futures trade during the session Thursday. Packers are expected to post most bids $1 per cwt lower, although the wide price range at the end of the week could leave the market generally weak even though overall activity remains sluggish. Friday plant runs are expected to hit 461,000 head. Estimated Saturday runs are 85,000 head.
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