GENERAL COMMENTS
Cash cattle trade activity remains undeveloped with limited interest shown at this point. This is not unexpected with overall bids and asking prices not likely to actively develop until midweek. Trade is likely to be pushed off to the second half of the week, as traders focus on the split between futures and beef values seen over the last few days. According to the closing report, the national hog base is $0.28 higher compared with the prior day settlement ($56-$63.50) weighted average $62.89. The corn futures are higher in light activity. March futures were 2 cents higher Monday. The Dow Jones Index is 399 points higher with the Nasdaq up 84 points.
LIVE CATTLE
Live cattle futures closed mixed after trading mostly lower in most contracts through the session ($0.40 higher to $0.85 lower). Firm pressure redeveloped in nearby contracts following concern that additional selling activity will develop in feeder cattle trade through the week, and the weaker tone of the market may limit any stability in live cattle futures. Late-day support moved into the deferred contracts, which continues to drive additional longer-term buying back to the table. But this may not be enough to hold prices higher over the near future. Beef cut-outs: higher, $1.90 higher (select, $214.72) and up $1.15 (choice, $219.52) with moderate demand and light offerings (45 loads of choice cuts, 17 loads of select cuts, 9 load of trimmings, 12 loads of coarse grinds).
TUESDAY'S CASH CATTLE CALL:
Steady. Limited activity is expected to be seen through the complex with bids and asking prices undeveloped at this point. There is likely to be very little support seen in the complex to point to firming market levels. Most trade is likely to develop late in the week, after month-end and the futures market may see some market shifts.
FEEDER CATTLE:
Light-to-moderate pressure quickly developed across the complex ($0.17 to $0.55 lower) with traders focusing on limited trade and concerned with further market pressure. Very little long-term direction developed in the complex as traders focused on the bearish news in Friday's Cattle on Feed report, which showed overall cattle placement significantly higher than estimates. This caused only limited market pressure as the weakness in the complex through last week carried the brunt of market pressure. CME cash feeder index for 2/22 is $147.63, down $0.42.
LEAN HOGS:
Pressure developed across all lean hog futures with the focus on strong market pullbacks in nearby trade ($0.25 lower to $1.42 lower). Strong follow-through losses moved into the market, adding to the pressure that developed late last week. What started out as light-to-moderate position-taking following the run higher last week has potentially turned into a market shift with uncertainty about long-term support. There could be some additional buyer activity moving into the market, but the choppy moves in both pork values and cash trade is limiting underlying support. Pork prices firmed early in the week with moderate support developing in the pork cutout. Primal prices were mixed in a wide range as all markets moved with triple-digit shifts either higher or lower through the day. Pork cut-out: $80.27 up $0.79. CME cash lean index for 2/22 -- $69.78, down $0.39. DTN Projected lean index for 2/23 -- $69.32, down $0.46.
TUESDAY'S CASH HOG CALL:
Steady to $1 lower. Very little market direction is expected to develop through the hog complex given the recent market moves. Packers are expected to post most bids steady to weak early Tuesday morning as the general trend of the cash market is not expected to change. Tuesday plant runs are expected to hit 465,000 head.
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