Bullish market optimism quickly strutted into the livestock market Tuesday morning ready and willing to push prices higher following the early week gains. This momentum was quickly dashed as traders are faced with the reality of widespread commodity market pressure and questions about China meat demand. March corn is down 3 cents per bushel and March soybean meal is down $1.80. The Dow Jones Industrial Average is up 491.50 points and NASDAQ is up 186.19 points.
LIVE CATTLE
Initial gains created strong market optimism as triple digit price moves helped to spark initial volume Tuesday morning. Once the flurry of follow through buying interest faded, traders become more focused on widespread uncertainty surrounding beef export questions and China's ability to meet trade deal buying levels. February live cattle are up $0.025 at $121.70, April live cattle are up $0.025 at $120.75 and June live cattle are down $0.10 at $111.90. The inability for nearby futures to move significantly in either direction midday Tuesday could keep market stability the main focus through the end of the session. Very little additional fundamental or technical market direction has been seen Tuesday morning, similar sluggish direction expected through the rest of the day. Limited overall cash cattle activity is seen Tuesday morning with asking prices and bids still undeveloped. Given the stability in futures trade through the morning, feeders are expected to roll out higher asking prices, but many seem in little hurry to price cattle, given last week's market weakness. Packer interest may not become active until midweek, with the potential that trade may dribble into the market through the last half of the week.
Boxed beef prices are lower: choice down $0.50 ($211.06) and select down $0.09 ($207.33) with a movement of 47 loads (28.17 loads of choice, 10.39 loads of select, 0 loads of trim and 8.7 loads of ground beef).
FEEDER CATTLE
Despite a strong start early Tuesday morning, feeder cattle trade is leading the cattle complex lower midday. The ability for April contracts to defend support levels near $137 per cwt will be essential in helping to bring about renewed futures market support through the rest of the week. March feeders are down $0.10 at $136.55, April feeders are down $0.35 at $138.00 and May feeders are down $0.30 at $140.50. Increased overall movement is expected to be seen in the upcoming days and weeks at sale barns and internet auctions, which may set the general short-term tone for the cash markets.
LEAN HOGS
Lean hog futures have bounced around in a wide and uncertain trade pattern through most of the morning. Initial market gains helped to quickly post triple-digit gains in nearby contracts, creating expectations of follow-through support through the rest of the session. These gains were short-lived as buy orders ran dry quickly leaving markets unsupported. Questions of how continued coronavirus issues in China will affect the overall economy and also the ability to maintain expected import levels of pork has caused significant turmoil through the entire lean hog complex. February lean hogs are up $0.55 at $56.85, April lean hogs are down $0.80 at $61.92 and May lean hogs are down $0.20 at $71.05.
The projected lean hog index for 2/03/2020 is down $0.31 at $61.10, and the actual index for 1/31/2020 was down $0.95 at $61.41. Hog prices are higher on the National Direct Morning Hog Report, up $1.11 with a weighed average of $53.96, ranging from $45.00 to $54.23 on 4,532 head sold and a five-day rolling average of $54.14. Pork cutouts total 213.73 loads with 199.35 loads of pork cuts and 14.38 loads of trim. Pork cutout values: down $0.25, $69.59.
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