GENERAL COMMENTS
The livestock complex traded lower throughout much of Wednesday's market as fears of what the Federal Reserve would do grew heavier on the market as the day traded. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $2.18 with a weighted average of $73.03 on 10,408 head. March corn is up 1 1/4 cents per bushel and March soybean meal is up $0.50. The Dow Jones Industrial Average is up 7.94 points.
LIVE CATTLE:
Wednesday's market wasn't anything that the live cattle market hoped for, but as the complex looks to Thursday and Friday, there's still hope that thing could improve ahead of the weekend. Come Thursday morning, the market will anxiously seek export data and hopes that this week's report is as supportive as last week. The cash cattle market could begin to trade sometime on Thursday, but then again, it's just as likely that trade waits to develop until Friday as feedlots desire higher prices and know they have to work the market and work packers in order to get those higher prices. Wednesday's technical downturn likely stems from apprehensive emotions from traders as they sat on pins and needles, waiting to see what the Feds did with interest rates. The Federal Reserve raised the federal funds rate target by a quarter-percent to an upper limit of 4.75%, which was expected. Wednesday's slaughter is estimated at 127,000 head - steady with a week ago and 7,000 head more than a year ago. The cash cattle market didn't see much action through Wednesday's market though asking prices are noted in the South at $158 to $160 and are still undeveloped in the North.
The Fed Cattle Exchange Auction held today reported 60 lots (all lots in TX), totaling 974 head of cattle, none of which sold. Opening prices were at $155, bids were at $155.50, but they did not meet reserve prices of $158.
Boxed beef prices closed lower: choice down $1.02 ($265.07) and select down $0.14 ($252.78) with a movement of 121 loads (74.24 loads of choice, 11.92 loads of select, 20.01 loads of trim and 14.78 loads of ground beef).
THURSDAY'S CATTLE CALL: $1.00 to $2.00 higher. Given that packers are short bought, prices will likely turn higher this week when cattle trade.
FEEDER CATTLE:
No matter what way you look at it, feeders endured a mere blood bath through Wednesday's market. From trader's anxious nature in wondering what was going to happen in Wednesday's Federal Reserve meeting, to see the corn complex close just above steady by the day's end -- the feeder cattle market couldn't rally enough support to help its case throughout Wednesday's market. March feeders closed $2.90 lower at $183.25, April feeders closed $2.10 lower at $187.95 and May feeders closed $1.57 lower at $192.40. If and when the cash cattle market begins to trade, the feeder cattle market could then begin to find stability in the market again as it looks to the live cattle/cash cattle markets for support. The cold front that's blowing across the U.S. has hindered feeder cattle sales this week as some regions are experiencing freezing rain and poor road conditions, and others are enduring frigid temperatures. The CME Feeder Cattle Index for Jan. 31: down $0.05, $180.37.
LEAN HOGS:
The lean hog complex kept with its painful lower downtrend well through closing as the market couldn't seem to find footing amid such treacherous technical pressure. February lean hogs closed $0.90 lower at $73.97, April lean hogs closed $2.12 lower at $84.30 and June lean hogs closed $1.57 at $101.47. What was surprising to see was that not only did cash hog prices close higher (up $2.18), but the market also successfully moved 10,408 head. Packers are obviously needing hogs and willing to pay more money for them to ensure that they have enough inventory for their upcoming kills. Pork cutouts totaled 315.76 loads with 282.07 loads of pork cuts and 33.68 loads of trim. Pork cutout values: down $1.30, $78.95. Wednesday's slaughter is estimated at 490,000 head, steady with a week ago and 64,000 head more than a year ago. The CME Lean Hog Index for Jan. 30: down $0.13, $72.58.
THURSDAY'S HOG CALL: Steady. Given that packers have been supportive of the cash market already this week, they could drift away from the market come Thursday and Friday if their needs are fully met. However ,if they're still somewhat short bought, it wouldn't be surprising to see modest interest.
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