GENERAL COMMENTS:
Limited overall activity in the livestock market is seen Wednesday morning as traders are still in the middle of the holiday week and on one hand are recovering from the Christmas break, while on the other hand, preparing for New Year's and end of the year positioning.
Overall market participation remains sluggish in all markets, which in many cases leads to some market stability. But the overall lack of active volume in the market can also spark market swings based on a small percentage of normal trade activity in the market on a daily basis. Feeder cattle futures have continued to post moderate gains as traders look for potential firmness in 2024, while the rest of the livestock market is mixed to mostly lower at midday.
March corn is down 4 1/2 at $4.758 and March soybean meal is down $2.90 at $393.00. The Dow Jones Industrial Average is up 64.06 at 37,609.39.
LIVE CATTLE:
Live cattle futures have steadily backed away from early-week gains with mixed trade through most of the morning leading to moderate to firm losses at midday. February contracts continue to be the most actively traded contract in the complex, and is currently leading the market lower with losses over $1 per cwt. The rest of the market is holding moderate to firm losses as light trade through the holiday week is likely to limit renewed buyer support at this point.
December contracts are essentially dead in the water as limited open interest in this contract is dwindling fast with these contracts moving toward expiration quickly. The overall lack of volume in the market could allow for price shifts to continue to be seen through the rest of the session, but it is likely that the technical softness seen during the morning will continue through closing bell as traders adjust positions following Tuesday's active gains.
Cash cattle markets remain generally quiet, although a few bids are seen in Nebraska at $270 per cwt dressed basis. Asking prices are not readily available at this point, but for the time being there is little to no interest in current bids. It is likely that active trade will be delayed another day, and possibly until Friday.
December live cattle are $0.15 lower at $170.425, February live cattle are $1.30 lower at $169.1, April live cattle are $0.75 lower at $172.70.
Boxed beef prices are mixed: choice down $1.72 ($291.59) and select up $0.13 ($261.32) with a movement of 58.81 loads (35.50 loads of choice, 11.96 loads of select, zero loads of trim and 11.35 loads of ground beef).
FEEDER CATTLE:
Feeder cattle have posted firm follow through buyer support Wednesday morning. The continued movement higher is sparked by limited but supportive technical support trickling into the lightly traded feeder cattle complex. Following ample time to digest last week's cattle on feed and placement reports, the ability to limit fundamental pressure on the feeder cattle complex seems to be easing.
Although it is unlikely that significant short-term changes will quickly develop in any cattle market at this point, the strong market pressure seen over the last three months seems to be softening, giving way to renewed hope of a market recovery through the next year. It is also important to remember that limited trade volume is seen during the holiday week, creating some additional caution to the underlying support seen across the feeder cattle trade over the last couple of days.
January feeders are $0.75 higher at $224.30, March feeders are $0.80 higher at $225.375 and April feeders are $0.68 higher at $230.75.
LEAN HOGS:
Lean hog futures have continued to work lower through the morning, although limited buyer support has seen glimpses as mixed trade has been scattered through the complex at different times through the morning. Narrow gains in spot contracts at midday is an example of this. The rest of the complex remains under light to moderate pressure with prices generally 30 to 50 cents lower at midday. Firm losses Tuesday reiterated traders' disappointment to the news that hog numbers continue to remain stable with last year and have not yet started to decrease. This is likely to continue to impact nearby contract months the most, as overall breeding herd replacements are starting to show a slight decline, but it is uncertain if this will be enough to make a significant change in overall hog numbers and pork supply levels through much of 2024.
February lean hogs closed steady, April lean hogs are $0.55 lower at $75.525 and May lean hogs are $0.33 lower at $82.475. Hog Prices are lower on the Daily Direct Morning Hog report, down $1.90 with a weighted average of $46.19, ranging from $40.00 to $48.00 on 4,420 head with a five-day rolling average of $46.19. Pork Cutouts totaled 159.42 loads with 137.86 loads of pork cuts and 21.56 loads of trim. Pork cutout values are up $1.29 at $81.87.
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