GENERAL COMMENTS: Firm pressure developed late Wednesday in most livestock markets with nearby cattle and hog futures closing down 40 to 70 cents. Little has changed either technically or fundamentally in either of these markets, and futures continue to erode following the early week rally. The fact that commercial buying support has not stepped back into the market through the last two days is concerning. Prices could erode further, taking out early week gains. Cash cattle trade was undeveloped Wednesday with limited bids in the South at $121 per cwt. Dressed bids remain undeveloped at this point. Asking prices have become more available as feedlot managers are pricing cattle at $126 to $127 per cwt live and $200 to $203 dressed. Active trade is not likely until late Thursday or, more likely, sometime Friday. The National Daily Direct afternoon hog report was $0.43 lower ($45-$50.60 per cwt, weighted average $49.77) on 7,094 head sold. Corn futures were lower in light activity with the March futures contract down 3/4 cent. The Dow Jones Index was 21 points lower with Nasdaq down 26 points.
LIVE CATTLE: Early support in live cattle futures slowly trickled away Wednesday with nearby contract posting moderate losses. Futures ended the session $0.47 lower to $0.05 higher. A lack of market direction and the inability to sustain buying activity day after day is weighing on the live cattle market. The combination of firm pressure redeveloping in feeder cattle trade and concerns that wholesale beef values may not be able to push steadily higher through the end of the week has started to pull prices back from early week gains. Beef cut-outs: mixed, $0.73 lower (select, $212.37) to up $0.55 (choice, $217.57) with good demand and light offerings on 112 loads (59 loads of choice cuts, 18 loads of select cuts, 5 load of trimmings, 30 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL: Steady. Asking prices have started to develop and will continue to be offered early Thursday morning. Cattle are priced at $126 to $127 live and $200 and higher dressed. Bids are expected to be limited early Thursday, but should improve as the day continues.
FEEDER CATTLE: Firm pressure developed late Wednesday, pushing futures to close $0.17 to $0.65 lower. Pressure continued to move back into the market following mixed trade through the first half of the session. The lack of follow-through buying is causing some growing concerns that Monday's market surge may not be able to shift the trend higher. March and April futures led the complex lower, falling 65 and 60 cents per cwt, respectively, as limited outside market direction kept traders subdued. CME cash feeder index for 2/5 is $141.53, down $0.01.
LEAN HOGS: Nearby lean hog contracts saw losses of 50 to 70 cents in mixed trade. Overall, futures closed $0.70 lower to $0.15 higher. The strong surge in futures Monday sparked momentum, but so far, that momentum has been short-lived as traders face the reality that strong supplies and uncertain demand is hard to overcome, no matter how oversold the market remains. Pork cutouts saw light losses as strong gains in bellies were offset by moderate-to-strong pressure in other primals. Pork cutout values fell $0.61 per cwt, moving to $65.61 per cwt on 374 loads. CME cash lean index for 2/4 is $57.36, down $0.05. DTN Projected lean index for 2/5 $57.16, down $0.20.
THURSDAY'S CASH HOG CALL: Steady to $1 lower. Another round of winter weather is seen through much of the country. Although temps and snowfall are not expected to be as drastic as they were the last couple of weeks, transportation issues may limit procurement numbers. Bids are expected to be steady to $1 per cwt lower, although most bids are likely to once again be seen steady to weak. Thursday slaughter is expected to hit to 477,000 head. Saturday runs are pegged at 214,000 head.
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