Cattle futures posted strong follow-through losses Tuesday sparked by active market pressure seen at the end of last week and continued Monday. The concern that additional market softness may develop before technical support redevelops may leave live cattle and feeder cattle trade vulnerable to further losses midweek. Hog futures posted active gains, but given previous losses, it is uncertain just how deep current buyer support remains. Hog prices closed higher on the Daily Direct Afternoon hog report, up $1.97 with a weighted average of $85.40 on 3,719 hogs. March corn closed up 5 3/4 at $4.945 and March soybean meal closed up $10.30 at $314.00. The Dow Jones Industrial Average is up 134.13 at 44,556.04.
LIVE CATTLE:Live cattle futures continued lower late Tuesday despite a short-lived attempt to bring some stability to the market in the early minutes of morning trade. Triple-digit losses once again put pressure on the live cattle complex with a combination of spillover pressure from active feeder cattle losses and still uncertainty about how talk of tariffs would impact overall beef exports. February futures are still holding above the $200 per cwt for the time being, but nearby contracts have fallen $6 to $9 per cwt from last week's record high levels. Traders will cautiously monitor both outside market direction and beef values in the next couple of days which could help to bring some additional buyer support back to the table. Cash cattle markets are extremely quiet Tuesday afternoon with no sign of bids or offers developing in any area of cattle country. The price shifts through the futures market are causing both sides to take a "wait and see" approach before even entertaining the idea of throwing a number out. Given the strong price support last week and the early week volatility, cash markets may become even more volatile before the end of the week. February live cattle closed $3.00 higher at $200.05, February live cattle closed $1.10 lower at $201.875, April live cattle closed $1.50 lower at $198.65 and June live cattle closed $1.25 lower at $193.225.
Tuesday's slaughter is estimated at 122,000 head, 2,000 head less than a week ago and 2,000 head less than a year ago.
Boxed beef prices closed lower: choice down $1.26 ($330.73) and select down $2.43 ($317.41) with a movement of 105.54 loads (57.13 loads of choice, 28.96 loads of select, 7.04 loads of trim and 12.41 loads of ground beef).
WEDNESDAY'S CATTLE CALL: Steady. Lack of activity in cash cattle markets and the inability for bids is expected to set the tone for steady markets midweek until additional direction can develop. There is expected to be increased focus on futures direction through the end of the week as well as the ability to sustain current beef values over the coming days.
FEEDER CATTLE:Feeder cattle futures attempted to stabilize early Tuesday morning following sharp early week losses seen across the complex Monday. But any attempt to bring any support back to the market was very short-lived as the livestock market continues to remain rattled by talk of potential tariffs. The announcement that cattle imports from Mexico will resume, although the overall details are still unclear is adding further market uncertainty to the entire feeder cattle complex. Nearby feeder cattle futures have fallen $7 to $8 per cwt in the past two sessions and March contracts are now trading over $10 per cwt lower from market highs set last week. The inability to hold the recent momentum in the market may be just as or more impactful to the overall market structure as the actual price losses seen in the last couple of days. March feeders closed $2.25 lower at $268.25, April feeders closed $2.20 lower at $267.625 and May feeders closed $2.18 lower at $265.8. The CME Feeder Cattle Index for January 31: down $1.18, $279.45.
LEAN HOGS:Lean hog futures rebounded from sharp losses seen Monday as traders seemed to slowly but cautiously back away from the panic driven selling seen in the complex earlier in the week. Spot February futures were the least volatile market Tuesday with prices gaining 75 cents per cwt. But the rest of the complex posted strong triple digit gains through the end of the session. April futures led the market higher with a $3.40 per cwt gain, closing at $89/75 per cwt. This is still well below the $91.92 high last week, but the ability to bounce back from Monday's losses has given new life to the lean hog complex during early February. February lean hogs closed $0.75 higher at $85.075, April lean hogs closed $3.40 higher at $89.75 and May lean hogs closed $3.03 higher at $93.75. Tuesday's hog slaughter is estimated at 490,000 head, 6,000 head more than a week ago and 2,000 head more than a year ago. Pork Cutouts totaled 340.16 loads with 302.99 loads of pork cuts and 37.17 loads of trim. Pork cutout values are up $0.95 at $94.76. The CME Lean Hog Index for February 2: up $0.31, $84.08.
WEDNESDAY'S HOG CALL: Steady. Early cash hog bids are expected to be generally steady Wednesday morning. The volatility in lean hog futures prices as well as shifts in pork cutout values through the week may keep cash hogs unsettled but starting out Wednesday trade generally steady.
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