GENERAL COMMENTS:
The livestock complex is trading mixed into Friday's afternoon with only the live cattle contracts trading higher as traders finally saw the fundamental support they needed Thursday afternoon when Northern cash cattle traded $4.00 higher. The feeder cattle contracts are trading lower with the onset of higher corn prices, and the lean hog market is chopping sideways ahead of today's noon hour. March corn is up 7 3/4 cents per bushel and March soybean meal is up $2.90. The Dow Jones Industrial Average is up 7.47 points.
LIVE CATTLE:
The live cattle complex is again trading higher as the market notes that trade was reported Thursday afternoon in the North at $254, which is $4.00 higher than the previous week's weighted average. Upon seeing such an aggressive jump in Northern cash cattle prices, traders willingly moved Friday's market higher at the day's opening bell. Packers and feedlots in the South remain in a firm standoff as feedlots are unwilling to budge from their asking price of $161 to $162 and, at this point, packers have been reluctant to pay up. But as the minutes pass by, packers are likely to become more anxious as they came into this week short bought and will need to buy cattle ahead of the week's end. A sold bid of $158 is currently being offered in Texas, but that's $3.00 to $4.00 away from feedlot's asking price. February live cattle are up $0.07 at $160.90, April live cattle are up $0.25 at $163.87 and June live cattle are up $0.15 at $159.67.
Boxed beef prices are higher: choice up $0.62 ($269.91) and select up $0.08 ($254.09) with a movement of 62 loads (35.79 loads of choice, 5.57 loads of select, 5.61 loads of trim and 14.82 loads of ground beef).
FEEDER CATTLE:
Unfortunately, the feeder cattle contracts haven't traded higher despite cash prices in the North touting an impressive $4.00 rally as the corn complex is pushing a $0.03 to $0.06 rally in its nearby contracts. If the corn complex wasn't trading higher, it's very likely that feeders would be trading higher, as demand in the countryside for feeder cattle remains incredibly strong and as the cash cattle market has moved higher in the North. But just as every coin has two sides, the cattle market does as well. Not only do feeders need to see strong output prices in the form of higher fat cattle prices, but they must also watch their inputs, which is a full-time job here as of late. March feeders are down $0.30 at $186.52, April feeders are down $0.22 at $190.50 and May feeders are down $0.20 at $194.47.
LEAN HOGS:
The lean hog complex was trading higher in its nearby contracts heading into Friday's afternoon, but as the noon hour is quickly approaching, traders are apprehensive to be too supportive of the nearby contracts though they'd like to. It would be somewhat justifiable for the nearby contracts to again trade higher as midday pork cutout values are seeing modest interest, and stronger pork demand has been a theme of the market this week. Even though we know that pork demand could be bumpy from now until the third quarter, this week has seen modest demand and traders are taking note of that. April lean hogs are down $0.02 at $83.30, June lean hogs are down $0.02 at $101.62 and July lean hogs are down $0.27 at $103.60.
The projected lean hog index for Feb. 9 is up $0.21 at $74.01, and the actual index for Feb. 8 is up $0.05 at $73.80. Hog prices are lower on the Daily Direct Morning Hog Report, down $0.62 with a weighted average of $76.12, ranging from $66.00 to $80.00 on 5,511 head and a five-day rolling average of $75.03. Pork cutouts total 121.41 loads with 113.21 loads of pork cuts and 8.20 loads of trim. Pork cutout values: up $0.61, $81.00.
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