Wednesday Closing Livestock Market Summary - Strong Gains Developed in Livestock Futures

GENERAL COMMENTS

Cash cattle activity remains at a standstill with bids redeveloping at $124 live basis. Asking prices are becoming more evident at $129-to-$130 live basis, but still not able to get much interest generated in the form of sales. The Fed Cattle Exchange Auction Wednesday listed a total of 255 head, with 0 actually sold, 164 head listed as unsold, and 91 head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 255 total head, with 0 head sold, 164 head unsold, 91 head listed as PO ($124.00); NE -- no cattle reported; TX -- no cattle reported; 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: 255 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 $0.88 per cwt lower with an average price of $66.85 per cwt (trading range: $60.00-to-$68.50). The corn futures are higher in light activity. March futures were 1/4 cent higher Wednesday. The Dow Jones Index is 235 points higher with the Nasdaq up 79 points.

LIVE CATTLE

Firm underlying support slowly but steadily developed across the livestock complex. This helped to draw additional buyer interest into most contracts (0.17-to-$0.82 higher). Strong trade support redeveloped in front month February contracts with traders holding prices above $127 per cwt. The underlying buyer activity helped to bring increased interest into all markets, although there continues to be a sense of market caution about just how much additional buying will step into the complex. Beef cut-outs: lower, $0.84 lower (select, $203.13) and down $0.88 (choice, $207.36) with light to moderate demand and offerings (74 loads of choice cuts, 20 loads of select cuts, 6 load of trimmings, 27 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

Steady. Little to no direction developed across the complex as packers and feeders are a world apart with bids and asking prices. It is likely that it will be late in the week before active trade develops.

FEEDER CATTLE:

Firm buyer support developed despite early uncertainty Wednesday morning ($0.30-to-$0.92 higher). Strong support seen in all cattle markets helped to bring some increased overall support back to the feeder cattle complex. The gains in feeder cattle trade helped to spark renewed underlying support in all cattle markets Wednesday afternoon. CME cash feeder index for 2/12 is $147.57 down $0.06.

LEAN HOGS:

Strong gains developed in most contracts with buyer support helping to firm overall tone of the market ($0.10-to-$1.22 higher). Strong market support quickly developed across the complex with traders looking for increased overall support after the market shifts through the week. This move could help to spark some additional buyer activity back into the market late in the week. Carcass values trickled higher following mixed activity in primal values. Pork cut-out: $77.52 up $0.02. CME cash lean index for 2/12 $74.30 down $0.49. DTN Projected lean index for 2/13 $74.01 down $0.29.

THURSDAY'S CASH HOG CALL:

Steady to $1 lower. Buyer activity is expected to remain steady over the next couple of days. There is growing interest in bringing stability back to the market. There is uncertainty about long-term direction, but buyer support continues to develop. Most bids will likely be steady to 50 cents lower. Packer activity is expected to move 465,000 head Thursday with an estimated 84,000 head on Saturday.