GENERAL COMMENTS:
The live cattle and feeder cattle contracts are both trading lower into Friday's afternoon as the market stomachs the onset of weaker cash cattle prices this week. The lean hog complex has seemed to find some technical support, which is allowing its nearby contracts to trade higher. March corn is up 2 1/4 cents per bushel and March soybean meal is down $2.80. The Dow Jones Industrial Average is up 25.48 points.
LIVE CATTLE:
The cash cattle market wasn't able to save the day for the live cattle market and hold the line to keep prices at least steady. Instead, prices in the South have been reported at $156, which is $1.00 lower than last week's weighted average, and dressed prices in the North have been marked at $250, which is $2.00 lower than last week's weighted average. Feedlots have been able to advance the cash market steadily for over a month now, but packers one this week's tug-of-war battle. Come Monday, it will be incredibly important to see when these cattle were committed for, as it will indicate whether the upcoming weeks will still have leverage and power in hopefully being able to keep the cash market steady, if not advance it higher. The live cattle contracts are trading lower but in a mild manner as traders are thankful to see higher boxed beef prices at midday. February live cattle are down $0.37 at $157.17, April live cattle are down $0.32 at $160.60 and June live cattle are down $0.20 at $156.72.
Boxed beef prices are higher: choice up $0.94 ($278.43) and select up $1.03 ($258.04) with a movement of 68 loads (47.90 loads of choice, 6.51 loads of select, 3.20 loads of trim and 10.09 loads of ground beef).
FEEDER CATTLE:
Friday's weakness comes from a double-headed problem for the feeder cattle contracts as corn prices continue to print slightly higher and the cash cattle market is trading lower than last week's weighted averages. January feeders are down $1.17 at $180.95, March feeders are down $2.05 at $182.22 and April feeders are down $1.77 at $186.62. The onset of downward pressures has sent the spot March contract below both it's 40-day and 100-day moving averages. Feeders were banking on the fact that the cash cattle market was going to hold the line and trade cattle higher, so when prices began to be reported at $1.00 to $2.00 lower, the market began to scale down aggressively.
LEAN HOGS:
Interestingly enough, the lean hog complex may have finally found some support. The nearby contracts are all trading higher, while the deferred contracts continue with their mildly lower trend, but the success of the nearby contracts seems to be one of technical support. February lean hogs are up $0.12 at $78.87, April lean hogs are up $0.35 at $87.52 and June lean hogs are up $0.20 at $104.07. It's too early to tell whether or not the midday's higher regard to pork cutouts will trickle down into Friday afternoon's prices, but if pork cutout values do indeed close higher -- that's at least something the market can cling to when there's little support to be had.
The projected lean hog index for Jan. 12 is down $0.66 at $74.83, and the actual index for Jan. 11 is down $0.47 at $75.49. Hog prices are lower on the Daily Direct Morning Hog Report, down $0.03 with a weighted average of $72.35, ranging from $71.00 to $74.00 on 3,245 head and a five-day rolling average of $72.56. Pork cutouts total 216.53 loads with 188.69 loads of pork cuts and 27.83 loads of trim. Pork cutout values: up $4.40, $83.73.
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