GENERAL COMMENTS: Live and feeder cattle futures saw firm gains Monday as traders tried to adjust positions following losses late last week. The tone of cattle trade is starting to firm once again with live cattle prices nearing contract highs. Hog futures shifted lower in most contract months with the weaker tone of the market offset by limited short-covering. Activity in the cash cattle market has remained quiet following steady-to-lower trade seen late last week. New Showlists are generally smaller, with gains in Colorado offset by lower offerings in all other states. Bids and asking prices are undeveloped and are likely to remain quiet until midweek or later. The National Daily Direct Hog reports were delayed due to packer submission problems. Cash hog prices were unavailable at the time these comments were posted. Corn futures ended lower in light activity with the March contract 1/2 cent lower. The Dow Jones Index is 235 points lower with the Nasdaq down 83 points.
LIVE CATTLE: Late-day gains pushed live cattle futures $0.22 to $0.52 higher. Light-to-moderate buyer support is quickly moving into the live cattle complex this week. April live cattle futures have moved back above $127 per cwt, and the contract is now within striking distance (40 cents per cwt) of setting new contract highs set during the middle of January. A move back above these levels is expected to spark renewed fundamental support, which should signal strong buyer support through early February. Beef cut-outs: mixed, $0.42 lower (select, $211.61) to up $0.39 (choice, $217.40) with moderate demand and offerings on a total of 121 loads (71 loads of choice cuts, 17 loads of select cuts, 14 load of trimmings, 18 loads of coarse grinds).
TUESDAY'S CASH CATTLE CALL: Steady. Limited interest is expected to be seen Tuesday morning as bids and asking prices are likely to remain silent until midweek or later. Active trade is likely to be pushed to the last half of the week.
FEEDER CATTLE: Buyer interest helped to stabilize feeder cattle futures Monday. Futures ended the session $0.10 to $0.85 higher. The gains offset late-week pressure that developed before the weekend. The January futures contract is showing limited interest as active trade has moved to the March and April contracts. All spring and summer contracts closed 72 to 85 cents higher Monday. Follow-through buyer support is expected to develop again early Tuesday. CME cash feeder index for 1/25 is $143.66, up $0.45.
LEAN HOGS: Lean hog futures settled mixed ($0.55 lower to $0.20 higher) in a narrow-to-moderate trading range despite a weaker market tone Monday. Sharp end-of-the-week losses Friday continued to pressure the lean hog market Monday. The lack of active seller activity opened the door for short-covering, which allowed limited buyer support to move back into the market. The market remains weak as traders continue to focus on fundamental and technical weakness. Additional losses could be seen the rest of the week. Pork values improved Monday following gains in all primal cuts, except bellies. Pork cutout values added $0.83 per cwt, moving to $68.50 per cwt on 286 loads. CME cash lean index for 1/24 is $58.50, unchanged. DTN Projected lean index for 1/25: $58.22, down $0.28.
TUESDAY'S CASH HOG CALL: Steady to $1 lower. Follow-through pressure is expected to develop early Tuesday morning as packers try to adjust spending, considering the market pressure over the last couple of weeks. Most bids are expected to be 50 cents lower. Tuesday slaughter is expected to hit to 477,000 head, but weather conditions may adjust procurement rates lower.
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