GENERAL COMMENTS:
Livestock futures continued to move higher in both cattle and lean hog markets despite softer and lackluster interest early in the session. Both live cattle and feeder cattle futures posted triple-digit gains in front-month contracts, while the lean hog market came back from morning price pressure to close higher for the sixth consecutive trading session. Beef and pork values helped to rekindle the expectation that a combination of fundamental and technical support continues to be building through the livestock complex near the end of the week.
Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.04 with a weighted average of $45.27 on 6,343 hogs. 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 1 3/4 at $4.578 and March soybean meal closed down $2.10 at $362.2. The Dow Jones Industrial Average is up 15.29 at 37,711.02.
LIVE CATTLE:
Live cattle futures moved higher once again with moderate to firm support developing in nearby contracts. Although spot month February futures are still trading below short-term resistance levels set in early January, the market is moving closer to the higher end of the sideways market trend. This could allow for follow-through buying to break this price point and spark renewed interest over the near future.
Cash cattle markets are starting to slowly develop with a few cattle sold in Nebraska on a dressed basis at $273 per cwt. This is $2 per cwt lower than last week's weighted average. It is uncertain if this is enough trade to set the tone for the week.
Although more cattle are expected to need to be sold before the end of the week, the winter storm developing across the Midwest will have an impact on cash cattle trade for the week, at least in Northern cattle country.
February live cattle closed $1.05 higher at $171.8, April live cattle closed $0.90 higher at $174.575 and June live cattle closed $0.88 higher at $171.975.
Thursday's slaughter is estimated at 116,000 head, 10,000 head less than a week ago and 6,000 head less than a year ago.
Boxed beef prices closed higher: choice up $2.82 ($285.89) and select up $3.00 ($269.94) with a movement of 114.80 loads (71.81 loads of choice, 13.66 loads of select, 9.58 loads of trim and 19.75 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady to $2 lower. Limited trade Thursday afternoon has put pressure on cash cattle prices at the end of the week. The winter storm in northern areas may continue to impact active trade through the end of the week.
FEEDER CATTLE:
Feeder cattle markets have continued to move higher with Thursday's gains breaking through short-term resistance levels set on Jan. 3. This move may not make a significant long-term difference, but it is helping to regain and build technical buyer support in all feeder cattle markets during early January. The ability to sustain this upward support and bring additional open interest to the complex over the next several days will help solidify additional buying interest and likely market support in all contract months.
January feeders closed $1.65 higher at $226.275, March feeders closed $1.28 higher at $227.4 and April feeders closed $1.28 higher at $232.725. The CME Feeder Cattle Index for Jan. 9: down $0.66, $227.75.
LEAN HOGS:
Lean hog markets continue to gain market support with additional price gains at the end of the session. Despite early losses, buyers stepped back into the market, helping to further push prices above short-term resistance levels. Thursday's moves higher is the sixth consecutive gain in the lean hog complex with spot month February futures gaining nearly $7 per cwt since the first of the month. This support is also helping to stimulate wider-spread buying interest through the entire lean hog complex.
February lean hogs closed $0.53 higher at $72.6, April lean hogs closed $0.10 higher at $79.05 and May lean hogs closed $0.05 higher at $84.75. Thursday's hog slaughter is estimated at 477,000 head, 14,000 head less than a week ago and 11,000 head less than a year ago. Pork Cutouts totaled 257.39 loads with 227.65 loads of pork cuts and 29.74 loads of trim. Pork cutout values are down $2.12 at $84.54. The CME Lean Hog Index for Jan. 9: up $0.72, $66.46.
FRIDAY'S HOG CALL: Steady to $1 higher. End of the week buyer support is expected to develop following continued gains in pork values and follow-through support across the futures complex.
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