GENERAL COMMENTS:
Livestock markets are mixed Tuesday morning following the long holiday weekend break, which for many producers across the country held significant weather challenges and bitterly cold temperatures. Cattle futures have posted strong gains Tuesday morning with the focus on continued underlying fundamental support and the potential to draw additional technical buying interest back into the market over the near future. Firm losses in the lean hog market are posing some underlying questions about the most recent market rally. March corn is down 3 1/4 at $4.438 and March soybean meal is up $5.20 at $367.3. The Dow Jones Industrial Average is down 263.29 at 37,329.69.
LIVE CATTLE:
Following the ability for spot month live cattle futures to break through short-term resistance levels late last week before the long weekend, active buying interest has redeveloped in nearby contracts. This has been most evident in February futures, which are holding strong, triple-digit gains and has moved above $173 per cwt. This is the highest price level since the end of November and is helping not only to instill buyer support back into the market, but spurring additional interest in other nearby and deferred contracts. Cash cattle trade remains quiet with limited interest. There are a few asking prices of $174 and higher in the South, but it may be mid to late week before significant interest is seen in most areas. February live cattle are $1.65 higher at $173.025, April live cattle are $0.95 higher at $175.125, June live cattle are $0.80 higher at $172.425.
Boxed beef prices are higher: choice up $2.73 ($294.15) and select up $6.92 ($279.48) with a movement of 69.75 loads (48.08 loads of choice, 7.19 loads of select, 3.98 loads of trim and 10.50 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures continue to hold triple-digit gains in most nearby and deferred contracts as buyers have actively returned following the holiday break. The focus on strong gains in beef values and expectations of additional cash market firmness is likely to help stimulate additional buyer support for not only nearby contracts, but contracts through the summer and fall months. The ability to sustain additional technical buyer support and attract even more open interest and volume in nearby feeder cattle contracts in the last half of January is likely to add even more price support to all contract months over the next couple of weeks. January feeders are $0.98 higher at $227.55, March feeders are $0.93 higher at $228.625 and April feeders are $1.13 higher at $234.125.
LEAN HOGS:
Lean hog futures have posted moderate to firm losses through the morning. Tuesday's weaker trade signals the second trading session in a row where prices have moved backwards. Even with this market pullback seen early in the week, it is important to remember the strong upward shift seen in lean hog futures over the past two weeks. A combination of position adjustments is still happening while traders try to assess the fundamental support available in the lean hog and pork complex over the next few days. The ability to keep February contracts above the $70 per cwt price level through the week will create significant impact in helping to sustain a positive market direction and keep traders generally active over the near future. February lean hogs are $1.60 lower at $70.3, April lean hogs are $1.50 lower at $77.125 and May lean hogs are $0.95 lower at $83.50. Hog Prices are higher on the Daily Direct Morning Hog report, up $1.10 with a weighted average of $45.65, ranging from $45.00 to $46.00 on 1,045 head with a five-day rolling average of $45.63.Pork Cutouts totaled 167.77 loads with 151.91 loads of pork cuts and 15.86 loads of trim. Pork cutout values are down $1.00 at $85.86.
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