Wednesday, January 3, 2018

Wednesday Midday Livestock Market Update - Mixed Trade Keeping Livestock Activity Sluggish

GENERAL COMMENTS: 
Livestock futures remain mixed in a narrow to moderate trading range as traders continue to focus on recent market shifts. Overall volume remains extremely sluggish with most traders willing to opt out of the market at this point in order to see additional market direction from both the outside and fundamental shifts of the complex. Corn prices are lower in light trade. March corn futures are 1/4 cent lower Wednesday. Stock markets are higher in light trade. The Dow Jones is 62 points higher while Nasdaq is up 53 points.
LIVE CATTLE:
Live cattle futures are holding a choppy but mixed trading range midweek with front month February pulling back from the previous market support although there is very little volume in any contracts and this is limiting market direction. Prices are hovering from 70 cents lower to 20 cents higher, although most contracts are able to hold narrow price gains through the morning Wednesday. The fact that strong gains redeveloped in boxed beef values is helping to stabilize the market, although this my limit additional market support at the end of the week. Cash cattle bids are undeveloped Wednesday morning which is not a huge surprise at this point. There is likely to be some additional market movement, but this may not develop until late in the week. A few asking prices seem to be surfacing in the South with asking levels of $126 and higher. This could bring about additional volume later in the week, but very little direction is seen at this point. The Fed Cattle Exchange Auction today listed a total of 388 head, with 0 actually sold, 388 head listed as unsold, and 0 head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 196 total head, with 0 head sold, 196 head unsold, 0 head listed as PO; NE -- no cattle reported; TX 192 total head, with 0 head sold, 192 head unsold, and 0 head listed as PO; CO -- no cattle reported; IA - no cattle reported; other states -- no cattle reported. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 388 head total, 0 head sold; 1-17 day delivery -- no cattle reported; 10-17 day delivery -- no cattle reported; 17-30 day delivery -- no cattle reported.
Boxed Beef cut-outs at midday are higher, $2.36 higher (select) and up $3.52 per cwt (choice) with light movement of 79 total loads reported (33 loads of choice cuts, 15 loads of select cuts, 7 loads of trimmings, 23 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures are inactive through the morning Wednesday. The overall lack of trade volume moving back to the market following sharp gains seen Tuesday is limiting not only market activity, but also market direction. Prices are mixed in a narrow range from 37 cents lower to 27 cents higher as traders continue to focus on the overall lack of buyer support returning to the mar`ket. At this point, there is very little concern that widespread pressure will flood through the market given the support in fundamentals and technical market shifts seen over the past few days. But this could also limit additional buyer support through early January.
LEAN HOGS:
Lean hog futures trade continues to focus on market adjustments in a narrow trading range. This has allowed more additional buyer support to move into the market and push price firmly higher in most contracts, although the tone of the market remains sluggish. Prices are listed from 25 cents per cwt lower to 40 cents higher as buyers focus on choppy market direction in all trade. The potential to keep these narrow market shifts through the end of the session will limit additional volume moving to the complex. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $1.42 at $60.31 per cwt with the range from $54.50 to $61.50 on 4,152 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report posted 227 loads selling with carcass values slipping $0.01 per cwt. Lean hog index for 12/29 is at $62.23 up $0.51 with a projected two-day index of $62.74, up $0.51.

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