The feedlot trade is generally light at midday with just a few deals in Nebraska turned in at $126, steady with the early week business but about 0.50 lower than last week's weighted average.
Packer inquiry suggests that we could see further cleanup action in Nebraska and Iowa before buyers call it a week. We assume asking prices are firming a bit in the face of bullish action on the board.
According to the midday report, the national hog base is $1.02 higher ($64.00-73.00, weighted average $71.58). The corn trade is a penny lower in late morning activity, checked by defensive action in the bean market.
LIVE CATTLE:
Live cattle futures are surging higher at midday (i.e., up 155 to 300), working hard to recovering from the early week mudslide. Renewed bullishness seems to be tied to aggressive short covering, cash premiums, fund buying, and technical considerations. Since 2017 began, spot Feb has been frustrated in mastering the highs of last November around 126.77. Bulls are knocking on that same old door as we move into the session's final hour. Beef cut-outs are mixed at midday, up .57 (select, $204.89) to off 0.06 (choice, $210.00) with very light box movement (22 loads of choice cuts, 13 loads of select cuts, zero loads of trimmings, 8 loads of coarse grinds).
FEEDER CATTLE:
Feeder issues are exploding at midday with prices up 262 to 385. In once fell swoop, the board seems to be blasting over the cash index for the first time in weeks. Although we didn't think the inventory report was a market movers per se, some traders may like the implication of a smaller feeder pool for profitable cattle feeders to draw upon for production needs through the second half of the year.
LEAN HOGS:
Lean futures have held moderate price progress through most of the session, but gains seem to building near midday (especially in spot Feb). Currently, lean prices are 20 to 142 points higher, boosted by further strength in the cash hog trade and spillover support from the cattle complex. Carcass value is substantially lower at midday, curtailed softer demand for all primals except the picnic. Pork cut-out: $83.03, up 0.47. CME cash lean index for 01/30: 73.85, up.01 (DTN Projected lean index for 01/31: 73.87, up 0.02).
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