GENERAL COMMENTS: Strong support quickly moved into livestock trade Tuesday with triple-digit gains developing in both cattle and hog futures. This may add some uncertainty through the end of the week, as hog futures moved off support levels as traders look for any hint of long-term buyer interest. Cash cattle bids were undeveloped Tuesday due to a lack of packer interest at this point. A few initial asking prices were floated across the market with live cattle priced at $130 and higher, while dressed trade was at $206 and higher. End-of-the-week trade is expected to be seen again unless a major shift in futures trade develops. The National Daily Direct afternoon hog report was $1 lower ($42.75-$46.65, weighted average $45.29) on 14,517 head sold. Corn futures were lower in light activity with March down 4 1/4 cents per bushel. The Dow Jones Index was 33 points lower with the Nasdaq down 5 points.
LIVE CATTLE: Early mixed trade gave way to strong gains in nearby contracts with February leading the complex higher. Futures closed $0.25 to $1.02 higher. The February contract continued to shift higher as traders try to get out of the complex with contracts in delivery and nearing expiration. The April contract gained 70 cents, nearing the $130-per-cwt level with a close at $129.92 per cwt, setting a new contract high in nearby trade. Continued movement through this level would likely spark renewed buyer support, although the air seems to get thin at these price levels. Beef cut-outs: mixed, $0.84 lower (select, $213.73) to up $0.12 (choice, $219.67) with good demand and light offerings, 134 loads (82 loads of choice cuts, 27 loads of select cuts, 9 load of trimmings, 15 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL: Steady. Markets are expected to be quiet once again Wednesday morning. Limited asking prices are seen, but this is enough to set the initial price levels, although packers are unlikely to show bids in the near future.
FEEDER CATTLE: Feeder cattle futures saw strong gains of $0.32 to $1.12 as traders focused on the eroding grain trade. The combination of higher feeder cattle prices in the Oklahoma City market Monday and strong pressure in corn and soybean markets resulted in firm buyer support despite limited early trade volume. April led the complex higher, moving to $146.77 per cwt following a $1.12-per-cwt rally. Cattle futures testing the $130 level points to some additional underlying support in the complex. CME cash feeder index for 2/25 is $140.33, down $0.09.
LEAN HOGS: Lean hog futures saw sharp gains of $0.15 to $1.82 as traders backed away from early pressure on a lack of market news. No new direction is seen in cash markets, and long-term concerns remain about the ability to build pork demand. Nevertheless, traders stepped in front of the market, looking for increased market support through the end of the month. It remains to be seen if this support will hold, but traders seem to be distancing themselves from support levels of just under $53 per cwt. Pork cutouts stabilized Tuesday following several days of back-and-forth swings. Pork cutout values added $0.04 per cwt, moving to $60.96 per cwt on 436 loads. CME cash lean index for 2/22 is $53.13, down $0.52. DTN Projected lean index for 2/25 $52.85, down $0.28.
WEDNESDAY'S CASH HOG CALL: Steady to $1.00 lower. Packers are getting back into a more regular routine as hogs are moving to plants following the weekend storms. This is just in time for additional snow that is expected at the end of the week, while cold weather is expected to continue over the next couple of weeks. The focus on catching up from previous slower plant runs leaves excess hogs available at packers' disposal. Wednesday slaughter is expected at 477,000 head. Saturday runs are expected near 195,000 head, but are dependent on weather.
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