GENERAL COMMENTS: Firm pressure in nearby feeder cattle trade set the tone Thursday. Weakness in the cattle trade was due to traders adjusting end-of-the-month positions and taking protection in the event that long-term resistance at $130 per cwt holds. Hog futures posted strong early gains, but the gains eroded though the session on a lack of new market information and limited volume. Cash cattle markets were undeveloped with the same wide gap between asking prices and bids as seen through the first half of the week. Asking prices remain at $130 and higher live basis and $205 to $206 dressed, while bids are limited to $125 live and $202 dressed. Both sides seem ready to push activity to late in the day Friday. The National Daily Direct afternoon hog report was $0.56 lower ($42-$45.75, weighted average $44.72) on 7,451 head sold. Corn futures were lower in light activity with March falling 1 cent per bushel. The Dow Jones Index was 69 points lower with the Nasdaq down 21 points.
LIVE CATTLE: Live cattle futures saw narrow losses late Thursday as traders adjusted positions. Futures closed mixed, $0.32 lower to $0.55 higher. The February futures contract posted firm gains as traders tried to get out of positions before the contract expires. This took the emphasis off of light pressure in the rest of the complex as traders closely focused on sharp feeder cattle losses and limited market news in beef or cash trade. April futures settled 7 cents lower, as the inability of the contract to move above resistance midweek seems to have pulled buyers out of the market temporarily. End-of-the-month position adjustments were also likely a factor Thursday, which is putting more attention on early Friday trade. Beef cut-outs: higher, up $2.48 (select, $215.27) to up $0.49 (choice, $219.95) with good demand and light-to-moderate offerings, 136 loads (64 loads of choice cuts, 24 loads of select cuts, 8 load of trimmings, 40 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL: Steady. Cash cattle interest remains at a standstill going into Friday morning. Trade may not develop until late in the day Friday, as there remains a stalemate between asking prices and bids that has held over the last couple of days.
FEEDER CATTLE: Most feeder cattle futures saw sharp losses Thursday, adding renewed weakness to the cattle complex. Futures settled $1.07 lower to $0.12 higher. Month-end trade quickly sparked weakness through nearby feeder cattle futures, leading to triple-digit losses across spring and summer contracts. The intensity of the losses slowed significantly through the morning, but traders seemed content to back away from recent support due to the potential for higher production costs through the spring and summer months. CME cash feeder index for 2/27 is $139.94, down $0.52.
LEAN HOGS: Trade volume slowed significantly through the last half of Thursday's trading session, allowing lean hog futures to close with narrow gains of $0.05 to $0.55. Trade opened with sharp gains early Thursday, but market depth was challenged through the morning as prices steadily eroded. Nearby contracts managed to hold on to narrow gains at closing bell. The ability to sustain recent support levels was the key focus as traders closed out the month of February. Pork cutouts bounced higher as back-and-forth market shifts continued through late February. Pork cutout values added $0.92 per cwt, moving to $60.49 per cwt on 345 loads. CME cash lean index for 2/26 is $52.82, down $0.03. DTN Projected lean index for 2/27 $52.64, down $0.18.
FRIDAY'S CASH HOG CALL: Steady to $1 lower. Late-week price pressure is expected to continue through the cash hog complex with most bids expected to remain steady to 50 cents lower early Friday. Friday slaughter is expected at 477,000 head. Saturday runs are expected at 196,000 head.