GENERAL COMMENTS:
From Friday to Friday livestock futures scored the following changes: February Live cattle up $0.80, April Live cattle up $0.78; January Feeder cattle up $3.45, March Feeder cattle up $3.55; February Lean hogs up $1.90, February Lean hogs up $1.90; February Pork cutout up $2.95, February Pork cutout up $2.95.
Livestock futures traded lower through most of the morning Friday as traders used the late week session to adjust positions following a strong upward shift in all markets during the week. Feeder cattle trade turned higher Friday afternoon with end of week buying returning to the market, although the rest of the livestock complex was content carrying light to moderate losses into the weekend. Markets will remain closed Monday due to the Martin Luther King Jr Holiday and will resume normal trade Tuesday morning. Moderate to strong weekly gains developed in both cattle and hog futures, as traders continue to focus on potential growth opportunities during the upcoming weeks. Hog prices closed higher on the Daily Direct Afternoon hog report, up $0.22 with a weighted average of $45.49 on 2,955 hogs. March corn closed down 10 3/4 at $4.47 and March soybean meal closed down $0.10 at $362.1. The Dow Jones Industrial Average is down 118.04 at 37,592.98.
LIVE CATTLE:
Live cattle futures closed lower Friday following strong upward movement for the week. Moves seen Friday were a combination of limited trade activity in front of the three-day holiday weekend, and position taking opportunities for traders who have focused on a firming price move and fundamental strength developing through the first half of January. Live cattle futures still remain well encased in the sideways trading range seen over the last couple of weeks, but the potential to move above $172 per cwt in spot month February contracts in the upcoming days could quickly build more bullish interest into the entire cattle complex. Markets will remain closed until Tuesday, although the late week and weekend weather may further impact overall market fundamentals early next week. Cash cattle activity has started to develop late morning and through the afternoon Friday. Reported trade on a live basis has been reported at $172 in the South and $173 to $174 in the North. And dressed trade in the North at $273. These prices are $1 per cwt lower than last week's weighted average, but more trade is likely to develop, especially in the south before the end of the day. Northern trade may be slowed significantly by the winter storm blowing through the region, bringing another round of snow and dangerously cold conditions through early next week. This has quickly shifted both feeders and packers attention away from additional cattle sales and onto making sure each of their systems are ready for the challenges ahead in the coming days. February live cattle closed $0.43 lower at $171.375, April live cattle closed $0.40 lower at $174.175 and June live cattle closed $0.35 lower at $171.625.
Friday's slaughter is estimated at 105,000 head, 9,000 head less than a week ago and 11,000 head less than a year ago. Saturday runs are expected at 20,000 head, but could be quickly adjusted based on weather conditions at each of the plants. Weekly total slaughter for the week is expected to reach 549,000 head. This is still 2,000 less than week ago holiday slaughter, and 122,000 head less than year ago levels.
Boxed beef prices closed higher: choice up $3.37 ($289.26) and select up $1.91 ($271.85) with a movement of 125.59 loads (79.79 loads of choice, 15.62 loads of select, 3.99 loads of trim and 26.19 loads of ground beef).
MONDAY'S CATTLE CALL: Steady. Weather conditions through the Northern end of cattle country will continue to be a factor in both feedlot sales and plant schedules. This may limit early week activity even further than what is normally seen on a typical Monday.
FEEDER CATTLE:
Feeder cattle futures ended the trading session higher once again following moderate to firm morning losses. The late week pullback in the complex was focused on market positioning, but the limited overall volume through the entire complex, and feeder cattle market in particular allowed for late day buying to redevelop. This continued to expand the recent market rally, sparking increased support across the complex. The ability to secure strong triple digit gains in nearby contracts for the week has helped to evaporate some of the bearish fears that have so heavily impacted the feeder cattle complex over the past couple of months.
January feeders closed $0.30 higher at $226.575, March feeders closed $0.30 higher at $227.70 and April feeders closed $0.28 higher at $233.00. The CME Feeder Cattle Index for January 10: up $0.25, $228.00.
LEAN HOGS:
Lean hog futures closed lower Friday, breaking the six-day streak of higher market closes, as traders focused on market adjustments at the end of the week. With futures markets remaining closed Monday, lighter trade developed ahead of the holiday weekend, allowing for the opportunity to take profits and assess the strong upward shift across the complex. Lean hog futures have rallied nearly $7 per cwt since the beginning of the month, causing increased focus and pressure for a market correction to develop. The tone of the market still remains firm heading into next week, but the potential for aggressive and consistent gains may be limited without further fundamental support.
February lean hogs closed $0.70 lower at $71.9, April lean hogs closed $0.43 lower at $78.625 and May lean hogs closed $0.30 lower at $84.45. Friday's hog slaughter is estimated at 332,000 head due to weather, 157,000 head less than a week ago and 143,000 head less than a year ago. Saturday slaughter is expected at this time at 149,000 head. This will bring the weekly estimated slaughter total to 2.28 million head, 90,000 head less than a week ago, and 371,000 less than year ago totals. Pork Cutouts totaled 280.57 loads with 254.98 loads of pork cuts and 25.59 loads of trim. Pork cutout values are up $1.54 at $86.08. The CME Lean Hog Index for January 10: up $0.31, $66.77.
MONDAY'S HOG CALL: Steady. Additional fundamental support across the lean hog complex has continued to set the tone for steady to higher cash hog bids next week. But the weather challenges to process the already purchased hogs in the system may limit this market support Monday.
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