Cattle markets have turned lower once again Thursday morning with sharp triple-digit losses in feeder cattle quickly adding pressure to all cattle trade. Hog futures are showing renewed support with firm gains seen across the entire complex as traders focus on firming cash market interest. Corn markets are higher in light trade. March corn futures are 2 cents higher. Stock markets are lower in light trade. Dow Jones is 400 points lower with Nasdaq down 120 points.
LIVE CATTLE:
Sharp morning losses in feeder cattle trade have quickly eroded recent stability that had developed in live cattle markets. Live cattle futures are eroding through the morning with contracts 65 to 90 cents per cwt lower as traders remain unwilling to step back into the complex. The current market pressure is still a long way from indicating any technical pressure, but the inability to continue to support nearby contracts after setting contract highs last week is weighing on the overall momentum of the complex. Cash cattle activity remains sluggish midday Thursday, but a few bids have started to develop. Packers have bid $120 live basis in the South and $194 per cwt dressed basis in the North. These bids are still well below asking prices of $125 to $126 live basis and $200 dressed, but it is starting to get the ball rolling. It is likely that trade decisions will not be seen until sometime Friday. Boxed Beef cut-outs at midday are lower, $0.57 lower (select) and down $0.26 per cwt (choice) with light movement of 76 total loads reported (53 loads of choice cuts, 11 loads of select cuts, 4 loads of trimmings, 8 loads of ground beef).
FEEDER CATTLE:
Follow-through pressure quickly developed Thursday morning as triple digit losses are seen in all contract months. The weakness in feeder cattle futures is adding even more pressure to the live cattle complex, which has posted additional losses near $1 per cwt at midday. Front month January futures have tumbled $2.50 per cwt from last week's highs as traders have been unable to bring additional buyer support back to the market in the first couple sessions of 2019. Even though firm beef demand is expected to develop, the lack of support in outside markets and concerns of global market pressure is limiting price support in cattle trade.
LEAN HOGS:
Commercial buyer support is slowly moving back into lean hog futures with limited trade volume developing Thursday morning, although prices have shown renewed support through the first couple of days of January. February futures are trading at $62.35 per cwt, after a 65-cent rally. This is distancing itself from recent support levels set during the holiday week at $60.30 per cwt. Follow-through market gains through the end of the week is likely to spark additional underlying activity through the entire complex. Cash prices are unreported due to confidentiality on the morning National Daily Direct Hog report. Cash prices are unreported due to confidentiality on the morning Iowa/Minnesota Daily Direct Hog report. Pork carcass values are lower on the morning report with prices falling $0.17 per cwt at $69.87 per cwt with 223 loads traded. Lean hog index for 12/31 is $53.08, down 0.15, with a projected two-day index is $53.25, up 0.17.
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