GENERAL COMMENTS:
Trader attention returned to the lean hog futures complex Tuesday morning as continued buyer interest has steadily but systematically moved into nearby lean hog contracts. February contracts are trading over $2 per cwt higher at midday, following strong support in spot month contracts through the entire trading session. Cattle futures seem to have settled into a more stable routine through early week trade with prices mixed within a narrow to moderate range. The ability to sustain current market trends is slightly encouraging given the volatility seen over the past couple of months, but traders continue to focus on light to moderate market growth through early 2024.
The direction of cash cattle trade and beef values will have a significant impact in drawing additional fundamental buyer support to the table over the next few weeks.
March corn is up 3 at $4.58 and March soybean meal is down $1.20 at $367.3. The Dow Jones Industrial Average is down 149.82 at 37,533.19.
LIVE CATTLE:
Live cattle futures are mixed once again Tuesday morning following the late-day pullback in live cattle futures Monday afternoon. Firm gains are holding in front-month February contracts, with underlying support seen in all spring and summer contract months during morning trade.
Overall volume is expected to be light to moderate through most of the trading session, although live cattle futures currently find themselves well entrenched within a sideways trading range with very little indication that prices will be able to break outside of this range any time soon. The slow but steady support based on potential fundamental beef support over the upcoming days and weeks is the focus of many traders, which could help stimulate additional steady gains in nearby contracts as the week continues.
Cash cattle markets remain at a standstill with asking prices and bids are still undeveloped. It is likely that active trade will be delayed until the end of the week.
February live cattle are $0.60 higher at $170.55, April live cattle are $0.33 higher at $173.35, June live cattle are $0.15 higher at $170.5.
Boxed beef prices are higher: choice up $1.96 ($280.79) and select up $3.30 ($262.66) with a movement of 53.76 loads (27.00 loads of choice, 12.52 loads of select, zero loads of trim and 14.24 loads of ground beef).
FEEDER CATTLE:
Feeder cattle trade is mixed to mostly lower Tuesday morning with prices slipping near midday. Nearby futures are under pressure, focusing on losses of around $1 per cwt in March contracts as traders back away from early week gains. It is likely that very little long-term direction in the market will develop with traders becoming comfortable trading back and forth within a narrow to moderate trading range this week.
January feeders are $0.63 lower at $223.25, March feeders are $1.03 lower at $224.05 and April feeders are $0.40 lower at $229.70.
LEAN HOGS:
Lean hog futures are trading higher Tuesday morning with aggressive triple-digit gains holding in nearby contracts. The recent shift higher has led to a four-day market swing higher and moving front-month contracts over $4 per cwt above support levels seen at the first of the year. A combination of steady technical buyer support combined with fundamental support from cash hog and pork values has allowed for renewed trade volume to step back to the table.
At current levels, technical support may start to ease as traders may start looking for position taking opportunities in the upcoming days, but the underlying support surrounding the lean hog complex continues to be firm.
February lean hogs are $2.10 higher at $72.7, April lean hogs are $1.28 higher at $78.80 and May lean hogs are $0.55 higher at $84.50. Hog Prices are lower on the Daily Direct Morning Hog report, down $0.78 with a weighted average of $43.6, ranging from $43.00 to $46.00 on 2,973 head with a five-day rolling average of $44.73. Pork Cutouts totaled 186.07 loads with 169.32 loads of pork cuts and 16.75 loads of trim. Pork cutout values are down $0.25 at $83.12.
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