GENERAL COMMENTS: Lean hog futures quickly and aggressively led the livestock market higher as traders focused on short-covering following early week pressure as well as hopes that exports will improve on a China trade deal. Cattle markets were mixed in limited activity. Cash cattle markets were quiet Thursday with both sides apparently waiting until Friday. This added some additional apprehension, as trade may be delayed until after Friday's Cattle on Feed report. Bids have remained at $123 live and $198 dressed, still below asking prices of $128 live and $205 to $207 dressed. The National Daily Direct afternoon hog report was $1.53 lower ($44-$47.85, weighted average $46.37) on 6,233 head sold. Corn futures were higher in light activity with the March up 4 cents per bushel. The Dow Jones Index was 101 points lower with the Nasdaq down 29 points.
LIVE CATTLE: Live cattle futures settled mixed ($0.70 lower to $0.22 higher) in light trade Thursday. Traders slowly but steadily backed away from previous gains following concerns that additional pressure may develop Friday. Trade interest, which found refuge from hog market losses earlier in the week, quickly moved back into the lean hog complex pushing futures higher. There is some concern a trade deal with China could potentially increase production costs more than beef export levels over the short term. This is adding pressure to nearby contracts. Beef cut-outs: mixed, $0.09 lower (select, $211.41) to up $1.58 (choice, $218.07) with good demand and light offerings, 106 loads (63 loads of choice cuts, 18 loads of select cuts, 3 load of trimmings, 21 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL: Steady. Cash cattle business is being pushed to the end of the week once again with packers and feedlot managers sticking to their guns and unwilling to budge on price levels before Friday. This could set up a late-day standoff.
FEEDER CATTLE: Narrow price shifts developed in feeder cattle trade with nearby losses offset by light deferred gains. Futures closed mixed, $0.65 lower to $0.30 higher. Limited market activity developed through feeder cattle futures Thursday with nearby contracts pressured by strong gains in grains. The focus on reports that China plans to buy $30 million in additional ag products helped to stimulate buying in grains. This added pressure to nearby feeder cattle due to increased production costs. Traders will also focus on the delayed release of January's Cattle on Feed report Friday afternoon. CME cash feeder index for 2/20 is $141.11, up $0.01.
LEAN HOGS: Lean hogs saw strong buyer support, pushing futures to near-limit gains in late-day trade. Futures closed $0.15 to $2.97 higher. Buyer activity flooded the lean hog complex Thursday on reports China could buy more U.S. pork if and when a trade agreement is reached. April futures led the complex higher, but missed the $3-per-cwt limit by 3 cents per cwt at closing bell. All contracts through October posted gains above $2 per cwt. Pork cutout values quickly firmed as steady gains developed in most primal cuts, while belly prices increased nearly $10 per cwt. Pork cutout values added $1.06 per cwt, moving to $61.23 per cwt on 328 loads. CME cash lean index for 2/19 is $54.13, down $0.30. DTN Projected lean index for 2/20 $54.06, down $0.07.
FRIDAY'S CASH HOG CALL: Steady to $1 lower. Firm pressure has continued to be seen through the week despite the bounce higher in futures Thursday. Packers still have access to market-ready hogs at steady-to-lower prices, which should carry them through the end of the week. Friday slaughter is expected at 471,000 head. Saturday runs are projected at 151,000 head.
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