Moderate gains continue to hold in lean hog futures, despite the pull back from sharp triple-digit gains early in the session. Limited activity is seen in all markets as initial market positions at opening bell have limited additional trade activity. Cattle markets are under pressure as feeder cattle futures are pulling live cattle trade lower in limited volume. Corn markets are lower in light trade. March corn futures are 1/4 cent lower. Stock markets are mixed in light trade. Dow Jones is 36 points lower with Nasdaq up 12 points.
LIVE CATTLE:
Light to moderate pressure has developed in live cattle trade Wednesday morning. Traders have entered the New Year with a weaker tone that is starting to erode recent market strength seen during the holidays. Nearby live cattle futures have posted 30 to 50 cent losses, driven specifically by sharp triple digit losses in feeder cattle markets. The concern that follow through support will develop in feed markets is limiting early January buyer support, and could leave markets unsupported over the near future. Cash cattle interest remains sluggish with just a few scattered asking prices of $125 per cwt seen in the South through the morning. It is expected that interest will slowly develop through the next couple of days, but trade is not likely until sometime Friday. The focus of holiday activity and funding a full week of procurement next week should help to stimulate buyer support over the next couple of days. Boxed Beef cut-outs at midday are higher, $1.20 higher (select) and up $1.96 per cwt (choice) with light movement of 41 total loads reported (14 loads of choice cuts, 8 loads of select cuts, 15 loads of trimmings, 4 loads of ground beef).
FEEDER CATTLE:
Triple-digit losses have quickly expanded through the morning across feeder cattle trade. This is pushing prices $1 to $2 per cwt lower in nearby contracts as traders focus on the renewed support in grain markets. Firming soybean and corn prices has helped to spark increased buyer activity into grain trade, adding production costs to the cattle market. Limited trade volume has been seen in feeder cattle trade through the morning, but increased market movement is likely through the end of the week.
LEAN HOGS:
Light to moderate gains are holding in lean hog futures at midday with nearby contracts quickly eroding from strong early triple-digit support. Currently February through May contracts are holding gains of 40 to 60 cents per cwt. Even though this is a strong pullback from triple-digit gains early in the session, the price support in hog markets is helping to bring stability to a generally bearish attitude seen across livestock trade. The focus through the complex continues to drive increased buyer activity into the market during early January. Longer-term concerns about trade discussions with China are being overshadowed by expected cash market support. 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 higher on the morning report with prices gaining $1.05 per cwt at $71.24 per cwt with 129 loads traded. Lean hog index for 12/28 is $53.23, up 0.12, with a projected two-day index is $53.08, down 0.15.
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