GENERAL COMMENTS: Bearishness continues in the hog market with traders quickly running for the exits Tuesday morning as technical support quickly broke down and prices moved through long-term support levels. This shift lower swiftly led to unrestricted selling activity until markets were abruptly stopped by daily trading limits. Even though no new developments or news appeared in cattle trade, buyers jumped into the market, avoiding panic selling in the hog complex. Cash cattle activity is undeveloped Tuesday afternoon. For the most part, bids are quiet, with the only bid seen coming from a regional packer in Nebraska bidding $198 per cwt. Given the stability in cash prices, as well as futures gains, feedlot managers will not likely consider anything short of steady money at this point. The National Daily Direct afternoon hog report is $0.02 lower ($44.50-$49, weighted average $48.23) on 10,923 head sold. Corn futures are lower in light activity. March futures fell 5 cents per bushel. Dow Jones Index is 73 points higher with Nasdaq up 33 points.
LIVE CATTLE: Strong cattle gains tried to offset hog market pressure. Futures settled $0.17 to $1.27 higher. Live cattle futures were the bright spot of the livestock and grain markets Tuesday as traders tried to distance themselves from limit losses in hog trade and strong pressure in grain trade. Even though futures pulled back from session highs in limited volume, new contract highs were set in nearby contracts. The gains, which were based on limited fundamental support, are likely to create additional volatility through the rest of the week. Beef cut-outs: mixed, $0.54 higher (select, $213.54) to down $0.12 (choice, $217.27) with good demand and light offerings, 138 loads (98 loads of choice cuts, 23 loads of select cuts, 6 load of trimmings, 11 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL: Steady. Activity through the cattle market is expected to remain at a standstill Wednesday, although a few additional bids may trickle into the market. Cash sales are likely to be subdued until late in the week.
FEEDER CATTLE: Feeder cattle futures followed live cattle higher, closing $0.42 to $1.15 higher. Moves in cattle trade Tuesday had more to do with surrounding market shifts than actual activity in cattle markets themselves. Limited support developed early Tuesday, allowing light volume as traders assessed longer-term market direction. With the abrupt shift lower in hog trade, buying flooded the cattle complex, as traders looked for anything not bearish. Nearby contracts saw triple-digit gains most of the session. CME cash feeder index for 2/15 is $141.50, up $0.19.
LEAN HOGS: Hog futures plummeted $0.50 to $3 lower as technical pressure developed. Traders were clearly distancing themselves from any leftover support seen before the long weekend. Nearby contracts tumbled sharply lower in the first few minutes of trade, not slowing until they hit limit losses of $3 per cwt. Limit losses were seen in all contracts through August, as all 2019 contracts fell by triple digits. The inability to hold support above summer lows caused the April futures to set contract lows, bringing additional liquidation. This move will result in expanded trading limits Wednesday, with fears of further pressure developing. Strong losses redeveloped in wholesale pork prices following belly futures lower. Pork cutout values fell $1.67 per cwt, moving to $59.91 per cwt, on 470 loads. CME cash lean index for 2/15 is $54.74, down $0.28. DTN Projected lean index for 2/18 $54.43, down $0.31.
WEDNESDAY'S CASH HOG CALL: Steady to $1 lower. The bearish market slide in futures trade is expected to erode packer bids Wednesday morning with most bids expected 50 cents to $1 per cwt lower. Wednesday slaughter is expected at 477,000 head. Saturday runs are projected at 154,000 head.
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