GENERAL COMMENTS: Livestock trade was limited Monday. Sharp triple-digit losses in early in nearby lean hog futures set a weaker tone, but hog futures were able to eventually move off morning lows as contracts fell $1 to $1.65 per cwt lower in nearby trade. Cattle futures were mixed in a narrow trading range, as corn and hog market pressure eroded firm morning buyer support. Cash cattle markets were quiet Monday afternoon following the sluggish market last week. Bids and asking prices are undeveloped. This is not unexpected at this point, as both sides are likely to be holding out for direction from futures trade and beef price changes. Showlists appear to be generally larger, which would be expected given the limited trade seen last week in cash markets. The National Daily Direct afternoon hog report was $0.49 lower ($43-$47, weighted average $46.41) on 4,815 head sold. Corn futures were lower in light activity with March down 4 3/4 cents per bushel. The Dow Jones Index was 105 points higher with Nasdaq up 41 points.
LIVE CATTLE: Firm buyer support quickly stepped into the live cattle market Monday morning following the higher cash cattle trade last week. However, the gains failed to hold, as traders pulled out of the market later in the day. Futures settled $0.12 lower to $0.35 higher. Traders are uncertain what the next round of Cold Storage and Cattle on Feed reports may hold, as last Friday's delayed reports gave little market direction. The strong pressure in the hog trade also pulled some traders away from the cattle complex as they tried to adjust to the market volatility in lean hog futures. Beef cut-outs: higher, up $2.22 (select, $214.57) to up $0.16 (choice, $219.55) with light demand and offerings, 83 loads (49 loads of choice cuts, 14 loads of select cuts, 4 load of trimmings, 16 loads of coarse grinds).
TUESDAY'S CASH CATTLE CALL: Steady. Limited cash trade developing last week has allowed for additional cattle to be carried over to this week. But, given the lackluster interest early in the week, it is expected that trade may not develop until the last half of the week again.
FEEDER CATTLE: Feeder cattle trade remained stuck in a narrowly mixed range following limited market direction Monday. Futures closed $0.40 lower to $0.35 higher. Firm pressure in corn trade sparked some support in spring and summer contract months. The April futures contract led the market higher with a 35-cent bounce on limited trader interest. The ability of live cattle futures to hold stable near contract highs is sparking some limited but firm interest in feeder cattle futures. CME cash feeder index for 2/22 is $140.42, up $0.89.
LEAN HOGS: Lean hog futures quickly came under pressure Monday, leading to concerns of further market pressure over the coming days. Futures closed $0.02 to $1.62 lower. The April contract temporarily broke through its support level of $62.97 per cwt set last week. The underlying concern is that growing hog supplies and sluggish demand will keep buyers on the sidelines. Prices moved more than $1 per cwt over session lows as seller interest became scarce at the lower levels, allowing markets to moderate a bit. This still leaves the complex in a challenging situation, with traders focusing on weak fundamental support as well as technical pressure. Pork cutout values firmed with strong gains in butt, ham and belly primal cuts. Pork cutout values added $1.91 per cwt, moving to $60.92 per cwt on 277 loads. CME cash lean index for 2/21 is $53.65, down $0.41. DTN Projected lean index for 2/22 $53.13, down $0.52.
TUESDAY'S CASH HOG CALL: Steady to $1.50 lower. The combination of strong futures market weakness as well as adverse weather conditions is expected to further erode cash hog markets Tuesday. Packers are trying to get back to a normal schedule following the weekend storm that disrupted production and hog movement. Most bids are expected to be steady to 50 cents lower as packers work through the backlog of hogs over the past few days. Tuesday slaughter is expected at 471,000 head.
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