Cattle futures have surged higher Tuesday morning with spot month live cattle futures moving to contract highs. The underlying support in all cattle trade remains firm, allowing for buyers to sustain renewed buyer activity. Hog futures are mixed to mostly lower as limited movement is seen Tuesday. Corn markets are lower in light trade. March corn futures are 1 cent lower. Stock markets are higher in light trade. Dow Jones is 225 points higher with Nasdaq up 48 points.
LIVE CATTLE:
Wide price shifts have developed in live cattle trade through the morning Tuesday. Initial market pressure seemed to limit buyer interest, although renewed feeder cattle buying quickly sparked widespread market gains in live cattle and feeder cattle futures. Prices have backed away from session highs in most contract months as the depth of buyer support seems to be limited Tuesday. This still has not kept buying away from the market with spot February futures $1.70 per cwt higher, testing $125 per cwt. These recent gains have set new contract highs, and quickly replaced the market correction seen last week in all nearby live cattle trade. Cash cattle interest is still extremely quiet with bids and asking prices yet to be established in any area. It is likely that active trade may not develop until late in the week, although increased packer interest may start to be seen midweek. Boxed Beef cut-outs at midday are lower, $0.11 lower (select) and down $0.01 per cwt (choice) with active movement of 113 total loads reported (69 loads of choice cuts, 28 loads of select cuts, 7 loads of trimmings, 8 loads of ground beef).
FEEDER CATTLE:
Strong triple-digit gains have moved into feeder cattle futures following the building pressure seen early Tuesday morning. Traders are looking for additional market activity to develop over the near future, as renewed fundamental support is developing in all cattle trade. January and March contracts continue to hold prices higher with prices $1.60 to $1.75 per cwt higher at midday. This may spark some additional underlying support through the entire cattle complex over the upcoming days as renewed buyer support moves into nearby contracts.
LEAN HOGS:
Moderate gains which developed through the morning have been unable to muster additional support at midday. This is limiting overall buyer activity, and pushing most contract months slightly lower at midday. Front-month February futures continue to hold market support, moving 50 cents per cwt higher to $62.40 per cwt. But narrow losses are slowly trickling into April through October contracts, with prices 7 to 25 cents per cwt lower. Limited trade is expected to be seen through the rest of the session, with very little market direction developing. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.45 at $49.47 per cwt with the range from $47.50 to $51.00 on 3,827 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork carcass values are higher on the morning report with prices gaining $0.25 per cwt at $70.81 per cwt with 285 loads traded. Lean hog index for 1/04 is $54.50, up 0.87, with a projected two-day index is $54.85, up 0.35.
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