GENERAL COMMENTS: Moderate buyer support quickly moved into the lean hog trade on the first trading day of 2019. Even though prices pulled back from session highs, the focus on renewed market support is building momentum. Cattle futures closed mixed in light trade following strong triple-digit losses early Wednesday morning in feeder cattle markets. The ability to focus on potential cash market strength is helping hold live cattle futures firm. Cash cattle markets remain quiet midweek with limited activity seen from packers or feedlot managers. A few asking prices were seen in the South during the midweek session with live prices set at $125 per cwt. Active trade is likely to be reserved until Friday. According to the closing report, the national hog base is $0.93 higher with a weighted average of $46.53 per cwt. The full range was $42 to $48 per cwt. Corn futures are higher in light activity. March futures were 3/4 cent higher. The Dow Jones Index is 18 points higher with the Nasdaq up 30 points.
LIVE CATTLE: Firm early morning pressure gave way to mixed trade as traders backed away from feeder cattle market pressure. Futures closed $0.47 lower to $0.32 higher. Limited trade activity developed Wednesday as traders returned from the holiday break. Strong early losses seemed to be the result of traders focusing on aggressive gains in grain futures and a triple-digit pullback in feeder cattle trade. This may allow for increased buyer activity later in the week as traders try to establish market support during early January. The pullback from contract highs in front-month February futures may bring some spillover buying back into the complex through the end of the week. Beef cut-outs: higher, up $0.25 (select, $210.91) to up $1.29 (choice, $216.64) with good demand and heavy offerings, 117 loads (43 loads of choice cuts, 23 loads of select cuts, 44 load of trimmings, 7 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL: Steady. Bids are unlikely to be seen early Thursday morning, although packer interest should slowly improve through the day. Active trade is expected to be pushed off until sometime Friday.
FEEDER CATTLE: Firm pressure swept through feeder cattle trade following the renewed support in grain trade, with futures closing $0.90 lower to $0.02 higher. Prices were able to quickly move away from sharp triple-digit losses in the morning, but the focus on underlying market weakness in feeder cattle trade and potential price pressure in all cattle markets helped to keep most prices lower at ending bell. The focus continues to be placed on short- and long-term production costs even though beef demand is expected to continue to remain strong. CME cash feeder index for 1/1 is $144.49, down $0.15.
LEAN HOGS: Firm gains have held in the lean hog trade, despite futures pulling back from early session highs. Futures closed $0.32 to $0.97 higher. February futures quickly surged higher Wednesday morning with traders focusing on potential buyer support in early 2019. But, with little overall market direction and questions about continued trade issues and demand growth uncertainty, traders quickly curbed early buying support. The focus on firming fundamental market moves is helping to bring about increased trader activity, pulling more buying activity back into the market. Pork values trickled lower with pressure developing in most primal cuts. Pork cutout values fell $0.15 per cwt, moving to $70.04 per cwt. CME cash lean index for 12/28: $53.23, up $0.12. DTN Projected lean index for 12/31: $53.08, down $0.15.
THURSDAY'S CASH HOG CALL: Steady to $1 higher. Initial bids are expected to see additional buyer interest with most bids expected steady to 50 cents higher. Thursday slaughter numbers are expected to be at 477,000 head with Saturday runs estimated at 420,000 head.
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