GENERAL COMMENTS: Early pressure developed in lean hog and feeder cattle trade Tuesday morning. Lean hog futures closed lower for the day, but nearby contracts still remain over $1 per cwt higher for the week. Live cattle futures continued to shift higher with firm gains developing in all nearby trade. Cash cattle markets remained sluggish Tuesday afternoon with a few token bids seen in the North at $196 dressed basis. Asking prices are still undeveloped as feedlot managers try to assess market direction before pricing cattle. Given the volatility in the market, feeders are unwilling to be too quick to put prices on inventory for the fear of leaving too much money on the table if markets continue to firm. It is likely that most business will be pushed off until late in the week. National Daily Direct afternoon hog report was $0.39 lower ($46 to $51.08, weighted average $50.16) on 8,008 head sold. Corn futures were higher in light activity with the March futures contract up 1 1/4 cents. The Dow Jones Index was 171 points higher with the Nasdaq up 53 points.
LIVE CATTLE: Live cattle futures were $0.12 to $0.97 higher. In contrast to the feeder cattle and lean hog trade, the live cattle market firmed through the day. Much of the support was because prices held moderate but realistic moves Monday, leaving traders no need to correct price levels Tuesday. The stability that is redeveloping in live cattle futures is built on firm fundamental support, and futures could make another run at contract highs before the end of the week. Beef cut-outs: lower, down $0.31 (select, $213.10) to down $0.63 (choice, $217.02) with light demand and moderate offerings on 127 loads (75 loads of choice cuts, 18 loads of select cuts, 11 load of trimmings, 23 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL: Steady. Limited interest is expected to be seen early Wednesday with asking prices still illusive and most packers unwilling to offer market bids at this point. More activity is expected through the day Wednesday, although trade may be seen later in the week.
FEEDER CATTLE: Feeder cattle futures close mixed, $0.40 lower to $0.20 higher. Light-to-moderate pressure developed Tuesday as traders backed away from strong Monday gains. The tone of the market continues to firm as the majority of early week support is still intact following position-squaring. The potential for increased buyer support through the end of the week could help bring additional stability to the complex. Feeder cattle sales on the Oklahoma City auction recorded a total of 12,200 head sold. This is nearly 2,000 head more than last week. Prices were generally steady to $2 higher on feeder steers, while feeder heifers under 650 pounds were generally $1 to $3 lower. Heifers 650 to 700 pounds averaged $2 per cwt higher than last week. CME cash feeder index for 2/4 is $141.54, up $0.53.
LEAN HOGS: Traders backed away from overly aggressive Monday gains on, pushing futures $0.15 to $1.45 lower Tuesday. The wide swings in the lean hogs market seen early this week could continue over the next several days. On Tuesday, all contracts backed away from initial losses. April through July futures posted $1-per-cwt losses and light pressure developed in deferred contracts. Underlying support still remains, as nearby contracts are still over $1 per cwt higher than where they started the week, leading to what could turn into an impressive market rally. Active pressure moved into pork cutouts Tuesday with all but rib cuts moving lower. Pork cutout values fell $1.90 per cwt, moving to $66.22 per cwt on 415 loads. CME cash lean index for 2/1 is $57.41, up 23. DTN Projected lean index for 2/4 $57.36, down $0.05.
WEDNESDAY'S CASH HOG CALL: Steady to $1 lower. Little change is expected early Wednesday in cash trade with bids expected steady to $1 per cwt lower. Most bids are expected steady to weak with stability expected to build through the entire complex. Wednesday slaughter is expected to hit to 477,000 head. Saturday runs are pegged at 240,000 head.
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