Strong underlying support is seen through lean hog futures trade Wednesday morning with traders focusing on strong gains in cash trade, while expectations of improving trade talks is helping to bring cautious buyers back to the table. Cattle markets softened through early trade, but have started to gain support at midday. Corn markets are higher in light trade. March corn futures are 2 cents higher. Stock markets are higher in light trade. Dow Jones is 135 points higher with Nasdaq up 62 points.
LIVE CATTLE:
Mixed trade has developed Wednesday morning with early pressure in the complex giving way to firm buyer support that is slowly moving back into the complex. This is the same trading pattern seen all week, with the underlying tone of the market firming, but traders seem to be less focused on moving into the market through the first couple of hours of trade. Nearby contracts are steady to 15 cents per cwt higher, as follow through support may develop later in the session. Cash cattle interest is slowly developing with just a few token bids seen in the North at $194 per cwt. A few asking prices are starting to develop at $126 live and $200 dressed. This may limit additional market movement through the rest of the day with active trade likely to wait until the end of the week. Boxed Beef cut-outs at midday are lower, $1.05 lower (select) and down $0.37 per cwt (choice) with light movement of 62 total loads reported (36 loads of choice cuts, 7 loads of select cuts, no loads of trimmings, 18 loads of ground beef).
FEEDER CATTLE:
Limited activity is seen Wednesday as traders seem to have hit "pause" following sharp gains seen over the last couple of sessions. Nearby contracts are steady to 20 cents lower, with very little additional support seen through the morning. But the underlying strong tone continues to be seen, which may spark additional support through the rest of the session.
LEAN HOGS:
Triple-digit gains have quickly moved into nearby lean hog futures trade as follow through buyer support in February futures has sparked additional market confidence through the entire lean hog complex. This may add some additional trade volume through the entire complex with underlying support developing across the entire market. Firm cash market activity is helping to shift additional interest into nearby hog futures trade. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.28 at $50.45 per cwt with the range from $47.50 to $52.00 on 5,040 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is up $0.80 at $51.56 per cwt with the range from $47.50 to $52.00 on 1,920 head reported sold. Pork carcass values are higher on the morning report with prices falling $0.03 per cwt at $70.13 per cwt with 285 loads traded. Lean hog index for 1/07 is $54.85, up 0.35, with a projected two-day index is $55.10, up 0.25.
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