GENERAL COMMENTS:
Firm morning pressure in all livestock futures Wednesday created some market uncertainty and questions about the ability to restimulate buyer interest through the end of the week. In the last couple hours of trade, sell orders quickly eroded, allowing for market support to develop and prices to quickly bounce higher with very little resistance. Feeder cattle futures led the upward market shift, allowing for strong gains near $1 per cwt to hold in most nearby contracts. Midday gains in lean hog futures prices helped to stimulate additional buyer activity during the afternoon, moving spot February futures back above $71 per cwt, and to the highest price point of the week. Growing fundamental support surrounding gains in meat values and potential further cash market gains through the end of the week has created additional market optimism. Hog prices closed higher on the Daily Direct Afternoon hog report, up $1.17 with a weighted average of $47.07 on 7,780 hogs. March corn closed down 1 1/4 at $4.423 and March soybean meal closed down $12.40 at $358.7. The Dow Jones Industrial Average is down 94.45 at 37,266.67.
LIVE CATTLE:
Live cattle futures shifted lower Wednesday morning with moderate to firm losses holding through most of the morning. At several points during morning trade, nearby live cattle futures were trading as much as $1 per cwt lower. The overall lack of renewed buyer support returning to the market as well as concerns surrounding potential cattle supply levels in the upcoming cattle on feed report led to the morning price pressure. Lack of follow through selling activity and limited overall volume during the afternoon helped to quickly erode sell orders, allowing markets to quickly move to positive market levels in most contract months. At closing bell, all but spot month February live cattle contracts closed higher, while February futures retracted most of the morning losses, but closed 2.5 cents per cwt lower. The ability to sustain the upward market support seen early in the week is helping create a sense of market calmness heading into the last half of the week. Cash cattle activity remains quiet, although a few bids have started to develop by the end of the day Wednesday. Northern bids of $273 dressed, and $175 live are seen, although these bids are still being passed on at this point. Asking prices in the North are not fully defined but are still reported at $174 to $175 live basis in the South. It is likely to be late Thursday or sometime Friday before active cash cattle trade develops this week, although feeders continue to focus on steady to higher cash trade for the week.
February live cattle closed $0.03 lower at $173.1, April live cattle closed $0.45 higher at $175.625 and June live cattle closed $0.63 higher at $172.8.
Wednesday's slaughter is estimated at 111,000 head, 17,000 head more than a week ago and 11,000 head less than a year ago.
Boxed beef prices closed higher: choice up $3.46 ($298.45) and select up $3.04 ($283.02) with a movement of 102.07 loads (59.66 loads of choice, 14.95 loads of select, 9.68 loads of trim and 17.78 loads of ground beef).
THURSDAY'S CATTLE CALL: Steady to $1 Higher. Cash markets remain sluggish, but feeders continue to focus on potential end of the week support and will likely hold onto higher asking prices well into Friday.
FEEDER CATTLE:
Feeder cattle futures quickly moved into positive territory in the last hour of trade Wednesday. The morning pressure seemed to quickly ease as sell orders quickly evaporated, allowing for markets to quickly and aggressively move higher, following the recent firming market pattern seen over the last couple of trading sessions. Nearby contracts posted gains nearing $1 per cwt by the end of the trading session focusing on a combination of technical support building through the complex as well as fundamental strength seen in cattle prices and beef values. The upcoming cattle on feed report Friday will be closely watched, with some market shifts possible through the end of the week as traders adjust positions in front of the report.
January feeders closed $0.88 higher at $228.425, March feeders closed $0.95 higher at $229.775 and April feeders closed $0.93 higher at $235.2. The CME Feeder Cattle Index for January 12: down $0.56, $225.87.
LEAN HOGS:
Lean hog futures closed higher in nearby contracts for the first time since last Thursday. The two-day market slide continued to develop Wednesday morning, as traders continue to adjust to the upward market moves in the last couple of weeks. Lack of follow through selling pressure and light volume left the market oversold and ripe for a price bounce Wednesday afternoon. Although most contracts closed mixed in a narrow trading range, the focus on regaining firm buyer support in nearby February and April contracts allowed for spot contracts to move to $71.45 per cwt following a 67-cent rally. The combination of recent cash hog market gains and firming pork values is helping to solidify unified buyer support in nearby contract months.
February lean hogs closed $0.68 higher at $71.45, April lean hogs closed $0.40 higher at $77.975 and May lean hogs closed $0.05 higher at $83.95. Wednesday's hog slaughter is estimated at 454,000 head, 59,000 head more than a week ago and 34,000 head less than a year ago. Pork Cutouts totaled 240.60 loads with 210.88 loads of pork cuts and 29.72 loads of trim. Pork cutout values are up $0.17 at $87.96. The CME Lean Hog Index for January 12: up $0.30, $66.85.
THURSDAY'S HOG CALL: Steady to $1 Higher. Follow through fundamental support in both pork cutout values and cash hog values is expected to lead to firming cash hog bids early Thursday morning.
No comments:
Post a Comment