GENERAL COMMENTS: The livestock trade saw wide swings early Wednesday. Renewed buyer support moved into the cattle trade, while market uncertainty continued to pressure hog trade. Triple-digit gains in feeder cattle futures were offset by similar losses in nearby lean hog futures. Cash cattle activity remains sluggish with just a few starter bids developing Wednesday at $122 per cwt in Kansas on a live basis, while limited dressed bids of $196 are seen in Nebraska. Asking prices are becoming more available at $126 and higher live and $200 dressed. Active trade is expected to be seen later in the week, potentially as late as Friday afternoon. According to the closing report, the national hog base is $0.40 higher ($48-$53.50, weighted average $52.49). Corn futures are mixed in light activity. March futures were 1/4 cent lower. Dow Jones Index is 171 points higher with Nasdaq up 5 points.
LIVE CATTLE: Live cattle futures followed feeder cattle higher, closing up $0.42 to $0.75. Market direction was limited with prices hovering at the top end of a moderate trading range. Futures have pulled back from contract highs. However, the April futures contract is still $2.50 per cwt above January lows and over $6 above support levels set in November. The tone of the market remains firm even though traders seem unwilling to step back into the market. Beef cut-outs: higher, up $0.32 (select, $212.04) to up $0.87 (choice, $217.21) with light demand and moderate to heavy offerings, 134 loads (64 loads of choice cuts, 20 loads of select cuts, 16 load of trimmings, 34 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL: Steady. Cash cattle markets are expected to limp into Thursday with little direction. Bids are likely to be re-established in the $122 live and $196 range Thursday morning, but are unlikely to gain much attention unless futures prices or beef values completely fall out of bed. Friday trade is a strong possibility given the lack of interest at this point.
FEEDER CATTLE: Feeder cattle futures closed $1.37 to $2.15 higher on strong buyer support. The moves were strictly reactionary, as buyers moved into the already oversold market, pushing prices off January lows posted Tuesday. The feeder cattle trade is trying to adjust to the strong support in live cattle and also to uncertainty over cattle placements. The lack of information due to the government shutdown has left traders trying to assess market conditions through early January. CME cash feeder index for 1/22 is $141.58, down $0.04.
LEAN HOGS: Lean hog futures fell $0.05 to $1.25 on growing long-term market uncertainty. Futures traded triple digits lower for most of the session, but the aggressive selling eased slightly at closing bell. This allowed nearby contracts to move above short-term support levels established last week. The April futures contract closed $1.25 per cwt lower at $64.85 per cwt. Traders remain concerned about ample pork supplies, especially later in the summer. Prices could hover near the lower end of their trading range through the near future. Pork cutout values continue to erode following moderate-to-firm pressure in all primal cuts. Pork cutout values fell $0.93 per cwt, moving to $68.70 per cwt on 334 loads. CME cash lean index for 1/21 is $58.33, up $0.26. DTN Projected lean index for 1/22: $58.58, up $0.25.
THURSDAY'S CASH HOG CALL: Steady to $1 lower. Firm pressure is expected to be seen in early bids Thursday morning, although most bids are expected to remain steady to weak. This may limit market movement as packers continue to secure needed hogs for scheduled plant runs. Thursday packer runs are expected to hit 480,000 head, with a Saturday scheduled run of 212,000 head.
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