Tuesday Closing Livestock Market Summary - Late Day Buying Stabilized Livestock Trade

GENERAL COMMENTS

Cash cattle trade continues to develop through the afternoon Tuesday with prices at $120 per cwt live basis in all areas and $192 per cwt dressed. These prices are generally stable with price levels that quickly developed Monday, but remain $1-to-$1.50 per cwt lower than last week on a live basis, and as much as $3 per cwt lower for dressed trade. Some additional cattle are likely to be sold through the rest of the week, but without a significant shift in futures prices are likely to remain in the current market range. According to the closing report, the national hog base is $1.72 higher compared with the Prior Day settlement ($60.00-to-$69.50) weighted average $67.26. The corn futures moved higher in light activity. March futures were 1 3/4 cent higher Tuesday. The Dow Jones Index is 136 points higher with the Nasdaq up 18 points.

LIVE CATTLE

Light to moderate buyer support trickled into late day markets following pressure in most of the complex through the majority of the trading hours. This allowed for stability to slowly develop ($0.17-to-$0.57 Higher). The ability to spark early week cash market activity, as well as renewed buyer support in feeder cattle trade, helped to add late day support to all live cattle contracts. The recent market pressure continues to create underlying concern that pressure may still be seen over the near future, but this is also limiting the activity during the month of February with the focus on beef movement over the coming weeks. Beef cut-outs: higher, $0.32 higher (select, $203.69) and up $0.29 (choice, $210.49) with light demand and offerings (70 loads of choice cuts, 25 loads of select cuts, 7 load of trimmings, 15 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL:

Steady with Tuesday Trade. The light to moderate trade that developed Tuesday posted dressed trade at $192 per cwt and live trade at $120 per cwt. This is expected to set the tone for the rest of the week, although some additional cattle are likely to be sold over the next three days.

FEEDER CATTLE:

Feeder cattle futures turned mostly higher in late day trade following the sluggish early market shift lower ($0.97 lower to $1.72 Higher). Front month futures bounced back from triple-digit losses through most of the session, but remain under pressure as February futures were the only contract to close lower. This allowed buyer support to move through the rest of the market with nearby futures closing in a positive but wide trading range in late day activity. CME cash feeder index for 1/8 is $152.42 down $1.50.

LEAN HOGS:

Narrow trading ranges have been contained through Tuesday's trade with mixed activity holding prices in a stable pattern ($0.10 lower to $0.30 higher). There is expected to be some additional direction developing through the end of the week, but with most contracts steady to 10 cents per cwt higher Tuesday, the inability to change the direction in the market is likely to keep most traders focused on fundamental market shifts. Carcass values firmed Tuesday following aggressive support in picnic and belly markets. Pork cut-out: $79.53 up $1.11. CME cash lean index for 1/05 $65.65, up $1.43. DTN Projected lean index for 1/08 $66.37 up $0.72.

WEDNESDAY'S CASH HOG CALL:

Steady to $2 Higher. Firm buyer support is expected to continue through the cash hog markets, with packers focusing on gaining access to large amounts of hogs due to current margins, and the ability to turn around and sell pork at profitable levels. Most early bids are expected to be 50 cents to $1 per cwt higher as traders focus on keeping plants full. Plant runs are expected to be at 465,000 Wednesday. Saturday runs are expected to be at 151,000 head.