GENERAL COMMENTS: Strong pressure developed again in the lean hog trade Thursday with April and June futures losing $1 per cwt. Although short-term support levels of $78.42 per cwt are still holding, the erosion of early week gains is leaving the complex in a vulnerable position. Cattle futures closed higher in late-day buying as initial market pressure was not strong enough to hold off buyer interest that was based on expected cash market support. Limited cash bids continued to be seen Thursday. Most trade activity will likely be delayed until sometime Friday. Bids have redeveloped at $122 live in Texas, and $198 to $200 dressed. Asking prices continue to hold near $126 to $127 live and $203 to $205 dressed, as feedlot managers continue to look for steady-to-higher cash trade at the end of the week. The National Daily Direct afternoon hog report was $0.35 higher ($45-$49.50, weighted average $48.60) on 10,748 head sold. Corn futures were lower in light activity with the March contract down 4 cents. The Dow Jones Index was 48 points lower with Nasdaq up 18 points.
LIVE CATTLE: Nearby live cattle futures closed higher following firm early market pressure. Overall, futures closed mixed, $0.17 lower to $0.47 higher. Light gains developed in most live cattle contract late Thursday as traders tried to test market direction. Prices bounced higher and lower through the session with nearby contracts holding in a $1- to $1.25-per-cwt trading range. The market was under pressure early in the session as traders continued to back away from recent contract highs based on limited new market news. But the focus on stable beef values and expected cash market strength at the end of the week helped to minimize market losses at closing bell. It is expected that prices will remain stuck in the current range in the near future, based on still-firm demand expectations. Beef cut-outs: lower, down $1.60 (select, $210.41) to down $0.37 (choice, $216.07) with light demand and moderate offerings of 113 loads (59 loads of choice cuts, 16 loads of select cuts, 15 load of trimmings, 22 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL: Steady. Bids continue to slowly develop, although packers have made little effort to improve price offers at this point. Cash market activity is expected to move into Friday with limited early activity once again seen. Asking prices are holding as feeders expect to force the hand of packers in order to gain access to needed cattle.
FEEDER CATTLE: Feeder cattle futures closed $0.30 to $0.55 higher. Firm gains steadily moved through feeder cattle trade following the combination of late-day pressure in grain trade and the ability for live cattle buyers to overshadow early softness. Corn prices ending 3 to 4 cents per bushel lower and soybeans posting double-digit losses helped to spur short-term buyer activity late Thursday. Live cattle futures bounced off of early lows with April closing above $127 per cwt, which allowed spillover interest to move into all spring and summer contracts. CME cash feeder index for 2/13 is $141.50, down $0.29.
LEAN HOGS: Hog futures tumble $0.45 to $1.10 lower on fundamental uncertainty. Active pressure quickly moved through lean hog trade Thursday morning, setting the tone. There is growing concern about continued lackluster pork exports as well as ample supplies of market-ready hogs. April through June futures led the complex lower as traders chipped away at early week gains. This weekly occurrence of early week buyer support followed by market pressure is testing long-term support levels and contract lows. Sustained support will require a combination of technical and fundamental buyer activity. Triple-digit losses moved through pork cutout values following a $6.14-per-cwt tumble in belly cuts. Pork cutout values fell $1.12 per cwt, moving to $62.76 per cwt, on 310 loads. CME cash lean index for 2/12 is $55.55, down $0.36. DTN Projected lean index for 2/13 $55.24, down $0.31.
FRIDAY'S CASH HOG CALL: Steady to 50 cents lower. Cash market pressure is expected to continue through the end of the week with packers focusing on keeping pace with the available hogs at their disposal. The pullback in processing schedules over the last couple weeks due to weather conditions has allowed packers to remain aggressive. Most bids are expected to be steady to weak through the end of the week. Friday slaughter is expected at 470,000 head. Saturday runs are expected at 214,000 head.
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