GENERAL COMMENTS:
Livestock futures have traded in a moderately mixed direction through the e Monday trading session. The movement of outside markets has had a direct impact on the overall movement and activity in most livestock futures Monday, although with some outside markets making a direct shift from significant losses to active gains.
Live cattle futures gave back lightly mixed trade at midday, closing lower in all contracts, while feeder cattle futures backed away session highs, closing mixed to mostly higher. Lean hog futures, on the other hand, have regained buyer support in the last hour of trade, helping to advance last week's gains, and spark renewed underlying fundamental and technical support.
Hog prices closed higher on the Daily Direct Afternoon hog report, up $0.34 with a weighted average of $44.9 on 928 hogs. March corn closed down 5 3/4 at $4.55 and March soybean meal closed down $0.90 at $368.5. The Dow Jones Industrial Average is up 216.90 at 37,683.01.
LIVE CATTLE:
Live cattle futures closed lower in all contract months Monday afternoon after spending much of the trading session within a narrowly mixed trading range. The rebound in stock markets during the end of the day limited live cattle traders who were focusing on slowly moving back into commodity trade.
Sharp losses in most ag commodity markets initially brought about renewed buyer support back to the complex, but with only limited support in beef values and sluggish cash cattle interest early in the week, buy orders quickly ran out of gas.
Cash cattle trade activity remains quiet, which is typical for a Monday. Trade last week was higher in all areas, creating optimism as feeders get ready to price cattle for this week's trade.
The five-Area weekly average moved to $174.01 per cwt, which is $1.77 per cwt higher than the previous week. Showlists appear to be mixed this week, but this still may not indicate early week trade.
February live cattle closed $0.63 lower at $169.95, April live cattle closed $0.38 lower at $173.025 and June live cattle closed $0.20 lower at $170.35.
Monday's slaughter is estimated at 115,000 head, 115,000 head more than a week ago and 12,000 head less than a year ago.
Boxed beef prices closed mixed: choice up $1.67 ($278.83) and select down $0.17 ($259.36) with a movement of 131.17 loads (73.31 loads of choice, 29.93 loads of select, 5.11 loads of trim and 22.82 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. Feeders are focusing on steady to higher money through the week, although bids and asking prices may not develop until midweek or later.
FEEDER CATTLE:
Feeder cattle futures closed mixed following a late day pullback in most feeder cattle contracts. Despite grain and feed prices falling firmly in futures trade, buyer support which was very evident early in the session seemed to cool in the last hour of trade. Even though prices cut session highs nearly by half in several nearby contracts, the focus on follow through gains in nearby contracts is still limiting any significant market pressure and concern that prices may not be able to hold current market trends in the coming days and weeks.
January feeders closed $0.75 higher at $223.875, March feeders closed $0.93 higher at $225.075 and April feeders closed $0.33 higher at $230.1. The CME Feeder Cattle Index for Jan. 4: up $0.93, $229.02.
LEAN HOGS:
Lean hog futures led the livestock complex higher Monday, sparking another trading session of positive market moves. There continues to be underlying support seen in nearby and deferred contract months as traders are focusing on the potential that demand for pork may bounce higher than expected, especially given firming economic news. This helped to push April contract to triple-digit gains Monday, sparking follow-through buyer interest in all contract months at the end of a very positive trading session.
February lean hogs closed $0.60 higher at $70.6, April lean hogs closed $1.15 higher at $77.525 and May lean hogs closed $0.80 higher at $83.95. Monday's hog slaughter is estimated at 440,000 head, 39,000 head less than a week ago and 48,000 head less than a year ago. Pork Cutouts totaled 302.46 loads with 250.65 loads of pork cuts and 51.81 loads of trim. Pork cutout values are up $0.82 at $85.02. The CME Lean Hog Index for January 4: down $0.01, $65.85.
TUESDAY'S HOG CALL: Steady to $1 higher. The combined support of a full procurement week and additional futures market gains, cash bids are expected to be steady to firm early Tuesday morning.
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