GENERAL COMMENTS: Narrow trading ranges slowly developed in mixed trade throughout cattle and hog markets Thursday. Cash cattle markets are still quiet following sluggish market activity. Although a handful of cattle were sold through the day at $195 dressed basis, this is still not enough to establish a market trend. Bids are expected to become much more active through the day Friday. Asking prices are likely to be seen early Friday at $125 to $126 live and $200 dressed. According to the closing report, the national hog base is $0.02 lower ($47-$53, weighted average $51.14). The sluggish movement may create additional stability going into the Friday session. Corn futures were lower in light activity, with March futures closing 5 cents lower. The Dow Jones Index is 122 points higher with the Nasdaq up 28 points.
LIVE CATTLE: Narrow gains slowly developed in live cattle trade as traders focused on continued fundamental support. Futures closed $0.02 to $0.12 higher. Futures traded higher and lower in a moderate range through most of the session with limited support trickling into the market at the closing bell. February futures posted only single-digit gains, hovering just below $125 per cwt. At this point, traders seem to still be focusing on firm market tones, but without prices moving above weekly highs and holding over $125 per cwt, the market could remain stuck in its current rut. Beef cut-outs: higher, up $1.30 (select, $207.77) to up $0.12 (choice, $213.96) with moderate demand and offerings, 125 loads (77 loads of choice cuts, 23 loads of select cuts, 9 load of trimmings, 16 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL: Steady to $2 higher. Packer interest is expected to firm through the morning Friday, but trade may drag out until late in the day. Asking prices are likely to remain stable with earlier week levels while bids should improve, barring a tumble in futures trade.
FEEDER CATTLE: Sluggish trade activity resulted in a mixed close of $0.10 lower to $0.20 higher. Spot-month January futures lost 7 cents per cwt, allowing increased market pressure to develop in a few other contracts late Thursday. The limited buying activity seemed to bring some stability to spring contract months, with March through May futures posting gains of near 20 cents per cwt. The pullback in grain and feed prices Thursday also seemed to bring some stability to the complex, although traders may still be unable to show significant support. CME cash feeder index for 1/9 is $145.55, down $0.15.
LEAN HOGS: Trade was mixed as traders focused on adjusting to previous gains. Futures closed $0.60 lower to $0.30 higher. Back-and-forth trade led to light-to-moderate gains in the February and April contracts. May through August futures saw moderate pressure due to losses in grains and uncertainty over trade negotiations. Any news coming out of the U.S. and China trade talks seemed vanilla, with neither side revealing many details on what lies ahead. This will affect longer-term market shifts more than immediate demand due to strong domestic movement. Pork rebounded Thursday with steady price support in most primal cuts. Pork cutout values gained $0.79 per cwt, moving to $70.46 per cwt. CME cash lean index for 1/08: $55.10, up $0.25. DTN Projected lean index for 1/09: $55.99, up $0.89.
FRIDAY'S CASH HOG CALL: Steady to $1 higher. Follow-through buying is expected to develop through the end of the week, although bids are not likely to be nearly as aggressive as over the last couple of days. Most bids are expected to be steady to firm. Friday plant runs are expected at 468,000 head. Saturday schedules are expected to be near 190,000 head.
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