Wednesday Closing Livestock Market Summary - Mixed Trade Keeps Livestock Futures Unsettled

GENERAL COMMENTS

Cash cattle activity remains quiet with traders focusing on the extremely light trade Tuesday. This seems to have set the tone for steady to firm market activity, but packers and feedlot managers seem to be unable to get a price agreement established. Bids are at $126 live, steady with early week trade, and $202 to $204 per cwt dressed. Asking prices remain at $128 to $130 live and $207 and higher. The Fed Cattle Exchange Auction today listed a total of 474 head, with 387 actually sold, 0 head listed as unsold, and 87 head listed as PO (Passed Offer). The state by state breakdown looks like this: Kansas 229 total head, with 142 head sold at $126.00, 0 head unsold, 87 head listed as PO ($126.00); Nebraska no cattle reported; Texas 245 total head, with 245 head sold at $126.00, 0 head unsold, and 0 head listed as PO; Colorado no cattle reported; Iowa no cattle reported; other states (Oklahoma, South Dakota, Minnesota) no cattle reported. The delivery date/weighted average breakdown is as listed: 1-9 day delivery: 474 head total, 387 head sold, with a weighted average price of $126.00; 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 $0.16 higher compared with the prior day settlement ($56.00-$63.50) weighted average $62.51. The corn futures are lower in light activity. March futures were 1/2 cent lower Wednesday. The Dow Jones Index is 82 points lower with the Nasdaq up 24 points.The corn futures are lower in light activity. March futures were 1/2 cent lower Wednesday. The Dow Jones Index is 82 points lower with the Nasdaq up 24 points.

LIVE CATTLE

Live cattle trade pulled back from earlier gains as pressure developed in feeder cattle and lean hog futures were unable to hold session lows. This allowed steady to slightly higher support to trickle into the market (steady to $0.27 higher). Spot April futures closed 70 cents off session highs as the inability to sustain early buyer support seemed to be the focus of the entire cattle market Wednesday. Even though buyer interest seemed strong and dedicated, the overall lack of support in the market near closing bell seems to raise additional questions about further market support. Beef cut-outs: steady to higher, steady (select, $215.20) and up $0.22 (choice, $223.57) with light to moderate demand and moderate offerings (89 loads of choice cuts, 18 loads of select cuts, 10 load of trimmings, 19 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

Steady to $1 higher. Given the extremely light trade that trickled into the market Tuesday and lack of follow-through activity Wednesday, cash trade is likely to be put off until later in the week. Most bids are generally steady with last week, but feeders expect they can push the bar over the next couple of days.

FEEDER CATTLE:

Late-day pressure eroded moderate support in the complex as traders focused on limited trade activity ($0.75 lower to $0.35 higher). Firm gains seen through most of the session seemed to quickly erode in the last half hour of trade. This replaced moderate to strong gains with underlying market weakness, which had previously developed across the market. March and April futures posted the most aggressive push lower, falling 52 to 75 cents per cwt. This raised concerns that any significant buyer activity will be able to move into the market and hold prices higher through the near future. This would limit overall market stability during early March. CME cash feeder index for 3/6 is $144.96 down $0.29.

LEAN HOGS:

Firm pressure developed through the lean hog futures complex with triple-digit losses in all nearby contracts for most of the session ($0.25 to $1.65 lower). April futures tested and broke through short-term support levels in the morning, but buyer support at the end of the session limited long-term pressure in the complex. Spot futures traded most of the session $1.60 per cwt lower, but moved back to a minimal loss of $0.40 per cwt at closing bell. This will likely add even more volatility to the market through the rest of the week. Pork prices tumbled sharply lower following swift losses in most primal cuts. Ham and belly markets posted the most aggressive losses with belly values falling $10.36 per cwt Wednesday. Pork cut-out: $74.71 down $3.21. CME cash lean index for 3/5 $67.52 down $0.17. DTN Projected lean index for 3/6 $67.66 up $0.15.

THURSDAY'S CASH HOG CALL:

Steady to $1 lower. The combination of packers resolve to limit spending continues to work for the most part as most bids early Thursday morning are expected to be steady to weak, even though the full range will likely continue to be steady to $1 per cwt lower. Weather challenges continue to be seen through parts of the country, which will likely limit several plant schedules. Thursday plant runs are expected to hit 454,000 head. Saturday runs are now pegged at 118,000 head.