GENERAL COMMENTS: Sharp losses in cattle futures quickly stole the attention of the entire livestock trade Tuesday morning. Early support in lean hog futures was minimized as traders continued to focus on increased outside market pressure. This is leading to questions about sustained buyer support in pork and beef cuts affecting long-term market direction. Cash cattle interest remains at a standstill with asking prices and bids still unavailable and likely to remain that way until midweek or later. The sluggish activity Monday will likely delay cash cattle trade until late in the week. According to the closing report, the national hog base is $0.15 lower ($46-$53.50, weighted average $52.20). Corn futures were lower in light activity, with March closing 2 3/4 cents lower. The Dow Jones Index was 405 points lower with Nasdaq down 150 points.
LIVE CATTLE: Pressure developed in live cattle trade following sharp triple-digit losses in feeder cattle. Futures ended the session $0.42 to $1.40 lower. The ability of traders to hold prices stable or slightly lower was quickly challenged by sharp losses moving through feeder cattle trade. This softness in feeder cattle, combined with triple-digit losses in the Dow Jones Index, sparked late-day pressure in nearby live cattle trade. February futures led the market lower, falling $1.40 per cwt to settle at $125.12 per cwt. Recent market support in live cattle trade is starting to be challenged by the ability to sustain support in the next several weeks. Beef cut-outs: higher, up $0.86 (select, $211.72) to up $1.08 (choice, $216.34) with good demand and light offerings, 94 loads (46 loads of choice cuts, 29 loads of select cuts, 5 load of trimmings, 14 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL: Steady. Limited interest is likely to be seen through Wednesday morning. Bids and asking prices may start to trickle into the market late Wednesday, but will likely be seen sometime Thursday.
FEEDER CATTLE: Strong triple-digit losses quickly swept through feeder cattle trade with futures closing $0.40 to $1.45 lower. All but the lightly traded January contract fell by triple digits. The March futures contract was down $1.32 to close at $41.50 per cwt. Following a push through early January lows during the morning, traders continued to focus on the inability to sustain buyer support and potential bearish placement levels developing over the next couple of months. CME cash feeder index for 1/21 is $141.62, down $0.09.
LEAN HOGS: Limited activity trickled into the lean hog trade early Tuesday with the traders focusing on market stability. Futures closed mixed, $0.17 lower to $0.70 higher. With the exception of a short-lived initial price surge seen Tuesday morning, pork market activity was limited as nearby contracts traded in a mixed range the entire session. Light pressure developed in April contracts, while light-to-moderate late-day support slowly tricked into other nearby contracts. Pork carcass values shifted firmly lower following sharp losses of $9.45 per cwt in belly markets, while narrow gains were seen in all other primal cuts. Pork cutout values fell $1.20 per cwt, moving to $69.63 per cwt on 362 loads. CME cash lean index for 1/18 is $58.07, down $0.09. DTN Projected lean index for 1/21: $58.33, up $0.26.
WEDNESDAY'S CASH HOG CALL: Mixed. Limited market direction is expected to be seen early Wednesday morning with bids likely 50 cents lower to $1 per cwt higher. Most bids are expected to remain steady early in the trading day, with the focus on outside market direction as well as potential midweek pork value shifts. Wednesday packer runs are expected to hit 477,000 head, with a Saturday scheduled run of 202,000 head.
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