Light activity has developed in cattle trade as feeder cattle markets sparking follow-through support based on pressure in grain markets. Lean hog futures are unsupported through most of the day with traders uncertain how the latest outside market pressure will affect the hog complex long term. Corn markets are steady in light trade. March corn futures are unchanged. Stock markets are lower in light trade. Dow Jones is 15 points lower with Nasdaq down 46 points.
LIVE CATTLE:
Mixed trade in live cattle futures has once again limited overall direction across the entire complex. There continues to be some increased overall support in deferred contract months based on the strong buyer activity in feeder cattle. But nearby trade remains mixed in a narrow trading range as overall limited direction is seen through the entire cattle market. Cash cattle bids have started to become more active with interest seen at $115 live basis in the South, while dressed bids are seen from $185 to $187 per cwt. It is still expected that most trade will be pushed off until Friday considering the current gap between bids and asking prices. Asking prices remain at $121 to $122 live and $190 and higher dressed. Boxed Beef cut-outs at midday are mixed, $0.62 lower (select) and up $0.47 per cwt (choice) with moderate movement of 67 total loads reported (40 loads of choice cuts, 13 loads of select cuts, 7 loads of trimmings, 7 loads of ground beef).
FEEDER CATTLE:
Buyer interest in the feeder cattle futures have been exclusively focused on the overall pressure in soybean markets and early softness in the corn trade. This will reduce overall production costs, allowing for traders to become more aggressive due to limited information available surrounding beef demand through the last couple of days.
LEAN HOGS:
Strong underlying pressure has redeveloped across lean hog futures with February futures holding pressure at 90 cents per cwt through late morning. The overall pressure in the complex has been sparked by aggressive softness in soybean markets as traders seem to be disappointed by the latest rounds of sales to China following all of the anticipation over the last couple of weeks. This is creating concerns about how much support the pork industry will see from any China buying activity. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is $0.32 higher at $46.74 per cwt with the range from $43.00 to $47.21 on 5,215 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork carcass values added $0.32 per cwt at $73.76 per cwt on 136 loads. Lean hog index for 12/11 is $55.54, down 0.44, with a projected two-day index is $55.36, down 0.18.
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