GENERAL COMMENTS:
Livestock futures are mixed Thursday morning with cattle trade posting moderate follow-through gains, while lean hog futures have eased slightly during morning activity. Outside the futures market, overall market activity remains sluggish through much of the Midwest. There's another round of winter storms starting to develop, which will not only impact transportation and slaughter levels through the end of the week, but will also move the focus away from marketing cattle and hogs and on to the overall animal health through the winter blast.
It is uncertain just how much new market direction will develop through the rest of the trading days with futures traders also keeping a close eye on the morning pressure in stock markets. March corn is down 1 at $4.585 and March soybean meal is down $0.30 at $364. The Dow Jones Industrial Average is down 221.12 at 37,474.61.
LIVE CATTLE:
Live cattle futures have posted firm gains at midday with February futures leading the complex higher. The combined support across the cattle futures market over the last couple of days combined with fundamental support from beef values in the last week has helped rekindle overall trade activity.
Even with these moderate to firm gains seen in nearby live cattle futures, the market remains well confined within a sideways trading pattern, with limited outside market news available to spark a significant shift in either direction in the near future. A move above $172 per cwt in spot February contracts would break through short-term resistance levels, potentially rekindling longer-term market gains.
In the weekly export sales report, net sales for 2024 marketing year, which began Jan. 1, totaled 12,200 mt were primarily for Japan (3,300 mt, including decreases of 200 mt), South Korea (2,400 mt, including decreases of 400 mt), China (2,300 mt, including decreases of 100 mt), Taiwan (1,300 mt, including decreases of 100 mt), and Mexico (1,300 mt, including decreases of 100 mt). Exports for the period ending Dec. 31 of 6,600 mt brought accumulated exports to 810,200 mt, down 14% from the prior year total of 942,000 mt. The primary destinations were to South Korea (1,800 mt), Japan (1,400 MT), Taiwan (900 mt), China (800 mt), and Mexico (700 mt).
Cash cattle trade remains at a standstill with bid and asking prices still hard to pin down through most of cattle country. Another round of winter storms starting to move through the Midwest is moving the focus away from cattle sales or purchases, and more on getting ready for not only another snow event, but bitterly cold weather over the next few days. This will not only affect cattle production and feedlot performance, but also may significantly impact transportation and plants' ability to maintain normal procurement schedules. It is reported that some cattle have been removed from showlists due to weather factors, as feeders feel comfortable holding cattle until next week or later at this point.
February live cattle are $0.70 higher at $171.45, April live cattle are $0.35 higher at $174.025, June live cattle are $0.30 higher at $171.40.
Boxed beef prices are higher: choice up $2.52 ($285.59) and select up $3.05 ($269.99) with a movement of 64.02 loads (31.78 loads of choice, 6.01 loads of select, 9.45 loads of trim and 16.78 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures continue to gain momentum and lead the market higher Thursday morning. Spot January contracts are posting triple-digit gains, which is helping to sustain additional buyer support through the entire complex.
Nearby contracts are near short-term resistance levels seen in the first week of January, and a close above $226.07 per cwt in January contracts would likely spark renewed technical support across the entire complex. The softness in corn markets is also helping create overall market firmness through Thursday morning, but there remains uncertainty given the recent volatility in stock markets, and the impact of inflation rating reports impacting the overall economy and thus, long-term beef demand.
January feeders are $1.25 higher at $225.875, March feeders are $0.88 higher at $227. and April feeders are $0.93 higher at $232.375.
LEAN HOGS:
Lean hog futures are mixed at midday with late morning buyer support moving into February futures contracts. The rest of the complex remains steady to moderately lower following the early morning pressure seen over the last couple hours.
The strong market shift higher over the past five trading sessions is allowing for the opportunity for position taking to be done, especially intraday trade activity.
Following the pattern of the last couple trading sessions, lean hog markets could see a late-day rally in the last hour of trade, but overall volume appears to be generally light late Thursday morning.
In the weekly export sales report released Thursday morning, net sales for 2024 marketing year, which began January 1st, totaled 23,300 mt were primarily for Mexico (7,400 mt, including decreases of 200 mt), Japan (4,300 mt, including decreases of 200 mt), South Korea (4,100 mt, including decreases of 900 mt), Canada (2,000 mt, including decreases of 600 mt), and Colombia (1,400 mt, including decreases of 100 mt). Net sales reductions of 73,500 mt were carried over from the 2023 marketing year, which ended Dec. 31. Exports for the period ending Dec. 31 of 10,500 mt brought accumulated exports to 1,580,000 mt, up 5% from the prior year total of 1,502,900 mt. The primarily destinations were to Mexico (5,300 mt), South Korea (1,200 mt), Japan (900 mt), China (700 mt), and Colombia (700 mt).
February lean hogs are $0.18 higher at $72.25, April lean hogs are $0.20 lower at $78.75 and May lean hogs closed steady. Hog Prices are lower on the Daily Direct Morning Hog report, down $0.22 with a weighted average of $45.52, ranging from $42.00 to $47.00 on 1,165 head with a five-day rolling average of $45.01. Pork Cutouts totaled 126.48 loads with 106.21 loads of pork cuts and 20.27 loads of trim. Pork cutout values are up $3.96 at $88.09.
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