GENERAL COMMENTS:
It's a mixed playing field for the livestock complex as the cattle market is trading lower into Tuesday's afternoon while the lean hog complex trades mostly higher. The onset of higher corn prices hasn't helped the market and unfortunately could continue to be a threat throughout the week. March corn is up 5 1/4 cents per bushel and March soybean meal is up $2.50. The Dow Jones Industrial Average is down 383.88 points.
LIVE CATTLE:
The live cattle market is sinking lower at the week's start as traders and feedlot managers alike appraise the marketplace. It's a kick in the teeth to see that 29% of last week's negotiated cash cattle trade was committed for the deferred delivery option, as that pads packers' inventory and minimizes their need to support the market both this week and moving forward. Before seeing how this week's cash cattle market trades, traders are hesitant to do much of anything, which is why the futures complex is trading lower into Tuesday's afternoon. February live cattle are down $1.30 at $156.42, April live cattle are down $1.20 at $159.70 and June live cattle are down $0.65 at $156.42.
Last week's negotiated cash cattle trade took place on Thursday and Friday of last week. Northern dressed sales were marked at $248 to $254, but mostly $250 to $252, which is steady to $2.00 lower than the previous week's weighted average. Southern live cattle trade ranged from $155 to $157 but was mostly marked at $156 which is $1.00 lower than the previous week's weighted average.
Last week's negotiated cash cattle trade totaled 78,199 head. Of that, 71% (55,227 head) were committed for the nearby delivery, while the remaining 29% (22,972 head) were committed for the deferred delivery.
Boxed beef prices are mixed: choice up $0.42 ($277.85) and select down $0.31 ($256.24) with a movement of 76 loads (35.00 loads of choice, 6.63 loads of select, 8.17 loads of trim and 26.33 loads of ground beef).
FEEDER CATTLE:
With the live cattle complex trading lower and grains again running higher, it comes as no surprise that the feeder cattle contracts are trading lower. The spot March contract has sunk below both the 100-day and 40-day moving averages and isn't far from testing support levels. The feeder cattle complex is going to need to see strength from both the live cattle contracts and cash market if it's going to trade higher again this week. Thankfully, demand will likely remain strong in the countryside as buyers are eager to get their hands on any cattle left to sell, but the market won't be able to cling to that support alone. January feeders are down $1.65 at $179.60, March feeders are down $1.42 at $181.45 and April feeders are down $1.15 at $185.90.
LEAN HOGS:
The spot February contract is trading lower into Tuesday's afternoon, but aside from that contract, the rest of the lean hog market is trading higher. Pork cutout values and the cash market aren't to thank as both are still trading lower, but as the lean hog market has plummeted to long term support levels, technically speaking the market is finding support and clinging to the promise that demand will be better in the second and third quarters of the year. February lean hogs are down $0.67 at $77.97, April lean hogs are up $1.37 at $88.67 and June lean hogs are up $1.60 at $105.47.
The projected lean hog index for Jan. 16 is down $0.16 at $74.18 and the actual index for Jan. 13 is down $0.49 at $74.34. Hog prices are lower on the Daily Direct Morning Hog Report, down $0.01 with a weighted average of $71.22, ranging from $65.00 to $74.00 on 3,095 head and a five-day rolling average of $71.86. Pork cutouts total 201.14 loads with 184.77 loads of pork cuts and 16.37 loads of trim. Pork cutout values: down $1.03, $79.56.
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