GENERAL
COMMENTS: Wide-ranging price swings were seen throughout livestock trade
Friday before the long weekend. Markets will remain closed Monday due
to Presidents day, and will return to normal schedules Tuesday morning.
Hog futures rallied Friday, with April leading the charge as traders
covered short positions and distanced prices from long-term support
levels. Cattle trade got caught up in the drama of lower feeder cattle
futures. Traders have various concerns about trade and outside markets.
From Friday to Friday, livestock futures scored the following changes:
Feb LC off $0.75; Apr LC off $0.75; Mar FC off $1.50; Apr FC off $0.68;
Apr LH up $4.48 and May LH up $2.05. Cash cattle trade remained
generally sluggish at midafternoon Friday. Another round of
late-afternoon or evening trade was expected. Bids were hovering in the
same pattern as seen the rest of the week, at $122 live and $198 to $200
dressed. Asking prices were not budging, and were holding at $126 to
$127 live and $202 to $204 dressed. The National Daily Direct afternoon
hog report was $0.21 lower ($44.50-$48.78, weighted average $48.51) on
4,379 head sold. Corn futures were mixed in light activity with the
March unchanged from Thursday. The Dow Jones Index was 445 points higher
with the Nasdaq up 45 points.
LIVE CATTLE: Feeder cattle futures closed mixed
($0.25 lower to $0.10 higher). Traders quickly changed direction Friday,
moving from firming midweek support to end-of-the-week profit-taking.
Strong losses create several concerns for the live cattle complex, which
will have to wait until Tuesday for additional direction. The
expectation that cash cattle trade would develop late in the day and
move higher Friday helped to limit selling activity. But traders remain
extremely cautious and concerned about future costs and long-term beef
demand. Beef cut-outs: higher, up $0.58 higher (select, $210.99) and up
$0.78 (choice, $216.85) with good demand and good-to-moderate offerings
of 102 loads (58 loads of choice cuts, 11 loads of select cuts, 13 load
of trimmings, 20 loads of coarse grinds).
MONDAY'S CASH CATTLE CALL: Steady. Packers and
feeders will return to work Monday even though futures markets will be
closed. The focus will be on showlist distribution and inventory-taking.
Bids and asking prices are unlikely Monday.
FEEDER CATTLE: Sharp losses flooded the feeder
cattle trade Friday with futures closing $0.55 to $1.47 lower. Nearby
contracts not only broke away from midweek gains, but also broke through
initial support, causing traders to quickly and aggressively back away
from the market. Growing concern about what any trade deal with China
will involve and how it will affect grain markets is the greatest focus
of feeder cattle trade at this point. A significant turnaround in corn
or soybean prices could quickly shift the focus in feeder cattle due to
unknown changes in production costs. CME cash feeder index for 2/14 is
$141.31, down $0.19.
LEAN HOGS: Lean hog futures saw firm gains
Friday. Futures settled mixed, $0.10 lower to $0.82 higher. Despite
previous market weakness and testing of long-term losses, nearby
contracts saw strong support. With the February contract now expired,
traders quickly moved to the April contract. Fundamentals remain
extremely weak, but short-covering developed ahead of the long weekend.
Moderate price shifts are expected Tuesday once markets reopen, but the
gains this week have given some breathing room in the still-bearish
market. Light gains developed in end-of-the-week pork buying. Pork
cutout values added $0.24 per cwt, moving to $63.03 per cwt on 286
loads. CME cash lean index for 2/13 is $55.24, down $0.31. DTN Projected
lean index for 2/14 $55.02, down $0.22.
MONDAY'S CASH HOG CALL: Steady to 50 cents
lower. Packers are expected to return early next week with
steady-to-weak prices. Even with futures markets closed Monday, regular
cash business is expected to develop with limited plant slowdowns
likely. Monday slaughter is expected at 472,000 head.
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