GENERAL COMMENTS:
The corn market's lower tone throughout Wednesday morning has allowed both the live cattle and feeder cattle contracts to trade higher, but the lean hog market isn't seeing the same support. It's unlikely that the cash cattle market will trade Wednesday, but some early bids could be offered later this afternoon. March corn is down 5 1/4 cents per bushel and March soybean meal is down $7.90. The Dow Jones Industrial Average is down 406.96 points.
LIVE CATTLE:
The live cattle complex has seemed to find some technical support around the market's 40-day moving average mark and is successfully trading higher into Wednesday's afternoon. Helping matters is also that corn prices are trading lower, which takes a little pressure off the complex as well. February live cattle are up $0.10 at $157.10, April live cattle are up $0.32 at $160.45 and June live cattle are up $0.35 at $157.15. It's too early for the cash cattle market to trade and no bids have been offered at this point. Asking prices in the South are noted at $158 plus but are still not established in the North. Given that packers were able to buy some cattle with time last week feedlots are going to have an uphill battle in getting cattle sold for more money than last week and will likely see prices either steady with last week's weighted average or slightly lower.
The Fed Cattle Exchange Auction held Wednesday reported 6 lots (4 lots in Texas and 2 lots in Colorado), totaling 979 head of cattle, none of which sold. Opening prices in Texas were at $155, high bids had a range of $155 to $155.50, but none of these bids met reserve prices of $156 to $158. Opening prices in Colorado were at $144, there were no bids, reserve prices were at $146.
Boxed beef prices are mixed: choice down $2.23 ($274.43) and select up $0.49 ($255.02) with a movement of 76 loads (52.74 loads of choice, 11.34 loads of select, 8.10 loads of trim and 4.27 loads of ground beef).
FEEDER CATTLE:
With corn prices now trading lower, the feeder cattle complex is posting a mild rally into Wednesday's afternoon as the market looks to redeem itself after Tuesday's sharply lower close. If corn prices continue to trade lower through the afternoon, and if the live cattle complex keeps with its higher trend, then the feeder cattle market will likely be able to close with these stronger tones as well as demand for both feeders and calves remains strong throughout sale barns. January feeders are up $0.35 at $180.00, March feeders are up $0.92 at $182.22 and April feeders are up $0.75 at $186.62.
LEAN HOGS:
After gapping higher on Tuesday, the lean hog complex is back to trading lower thus far throughout Wednesday's market. Both cash prices and pork cutout values are lower, but again it is supportive to see that the day has already moved 233.07 loads of pork cuts. If prices are going to be cheap, producers pray that packers' liquid inventory so that hopefully in the future when demand perks up packers will again have to support the cash sector. February lean hogs are down $1.10 at $77.35, April lean hogs are down $1.67 at $86.47 and June lean hogs are down $2.07 at $103.30.
The projected lean hog index for Jan. 17 is down $0.33 at $73.85 and the actual index for Jan. 16 is down $0.16 at $74.18. Hog prices are lower on the Daily Direct Morning Hog Report, down $0.96 with a weighted average of $70.26, ranging from $69.00 to $71.75 on 3,157 head and a five-day rolling average of $71.52. Pork cutouts total 233.07 loads with 231.03 loads of pork cuts and 20.04 loads of trim. Pork cutout values: down $0.07, $77.37.
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