General Comments
The livestock contracts continue to trade mixed heading into Wednesday's afternoon trade though the feeder cattle contracts have finally caught a break and are finally seeing some support develop after trading sharply lower all throughout this week and the later part of last week. There's some interest developing in the cash cattle market, though bids are $2.00 to $3.00 lower than last week's trade. March corn is up 6 3/4 cents per bushel and March soybean meal is down $8.00. The Dow Jones Industrial Average is down 29.79 points and NASDAQ is up 50.42 points.
LIVE CATTLE
While the feeder cattle contracts catch a break, the live cattle contracts have slumped to lower levels despite trying to trade higher earlier Wednesday morning. February live cattle are down $0.22 at $112.25, April live cattle are down $0.25 at $117.42 and June live cattle are up $0.02 at $114.95. It would help the cash cattle market if the futures market couple find some support and close modestly higher. It's positive to again see boxed beef prices higher but packers know that the first quarter can be a hard time for them to earn the lofty profits they're used to and they've taken a hard stance on this week's cash cattle trade. Bids are on the table in Kansas and Texas at $109 (which is $2.00 to $3.00 lower than last week's trade) and sharply lower than the South's asking prices of $113 to $114. The South has yet to really test their market this week and thankfully feedlots aren't panicking and selling out. The North is quiet following Wednesday's trade in eastern Nebraska where dressed cattle sold $2.00 to $3.00 lower at $173 to $174. Packer interest is expected to increase as the day goes on.
The Fed Cattle Exchange Auction listed a total of 1,532 head, of which 580 actually sold, 952 head were listed as unsold as they did not meet the reserve prices that ranged from $109 to $111. Opening prices started at $109, high bids ranged from $109.50 to $111. The state by state breakdown looks like this: Kansas 120 total head, all of which went unsold; Nebraska 110 total head, all went unsold; Texas 1,302 total head, with 722 head sold at $110.50 to $111, 580 head went unsold.
Boxed beef prices are higher: choice up $0.94 ($210.08) and select up $1.16 ($199.25) with a movement of 72 loads (45.55 loads of choice, 10.48 loads of select, 5.93 loads of trim and 9.61 loads of ground beef).
FEEDER CATTLE
The feeder cattle contracts have finally found some support after sinking lower all throughout the earlier part of the week. The contracts are finding some support at the $132.50 level and the mixed trade in the corn contracts is helping ease the pressure to keep trading lower. January feeders are up $0.32 at $133.55, March feeders are up $0.10 at $134.02 and April live cattle are up $0.07 at $136.25. The modest support rising in the futures market should help add some confidence to the feeder cattle sales developing Wednesday morning and afternoon.
LEAN HOGS
Nearby lean hog contracts are fighting some modest pressure, which is also unfortunately coupled with a weaker cash market. February lean hogs are down $1.35 at $67.15, April lean hogs are down $0.72 at $72.80 and June lean hogs are steady at $82.97. The market ran to resistance levels a week ago and has since not been able to muster enough substantial support in the spot February contract to keep the market trading higher. And even though midday cutout values are only up slightly, another day of higher cutout prices will always be welcomed.
The projected two-day lean hog index for 1/11/2020 is up $0.58 at $64.49, and the actual index for 1/8/2020 is up $0.57 at $63.91. Hog prices are lower on the National Direct Morning Hog Report, down $1.29 with a weighted average of $54.20, ranging from $44.00 to $57.00 on 4,768 head and a five-day rolling average of $55.49. Pork cutouts total 219.48 loads wit 197.35 loads of pork cuts and 22.13 loads of trim. Pork cutout values: up $0.37, $79.56.
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