GENERAL COMMENTS:
Livestock futures traded mostly lower through most of the midweek session with cattle markets leading the price losses most of the morning. Late-day buying developed in cattle and hog futures in the last hour of trade, allowing for mixed price levels at the closing bell. The bounce higher in cattle trade seemed to rekindle the early week support seen in the market and identified the Wednesday morning losses as generally short covering due to market volatility. The ability to bring buyers back to the complex Thursday morning will go a long way in helping to support price levels during early January with the focus returning to technical and fundamental market factors.
Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.25 with a weighted average of $44.88 on 9,041 hogs. March corn closed up 1 1/2 at $4.653 and March soybean meal closed up $0.90 at $380.40. The Dow Jones Industrial Average is down 284.85 at 37,430.19.
LIVE CATTLE:
Price shifts were evident through live cattle trade with morning price pressure backing away from Tuesday's gains, but the overall lack of selling pressure in the last couple hours of trade allowed for markets to close mixed in a narrow but supportive trading range. The ability to keep prices steady to higher through the end of the week is likely to create even more market momentum through the first half of January.
Front-month February contracts have now moved nearly $10 per cwt above December lows, which is helping to stimulate some additional noncommercial buying activity which liquidated their positions in the last few weeks.
Cash cattle activity remains generally quiet Wednesday afternoon although a few bids have started to surface in the North at $275 dressed basis. These are generally being passed at this point, and likely will not gain much attention until at least Thursday, or even maybe later. Asking prices are seen at $174 to $175 live basis in the South, but overall trade is still at a standstill.
February live cattle closed $0.08 lower at $171.85, April live cattle closed $0.25 higher at $174.75 and June live cattle closed $0.05 higher at $171.975.
Wednesday's slaughter is estimated at 128,000 head, 28,000 head more than a week ago and 4,000 head more than a year ago.
Boxed beef prices closed lower: choice down $6.31 ($278.03) and select down $0.01 ($258.85) with a movement of 160.13 loads (107.77 loads of choice, 30.49 loads of select, 6.22 loads of trim and 15.65 loads of ground beef).
THURSDAY'S CATTLE CALL: Steady. Feeders are looking for steady to higher prices as they start the new year, which may lead to late-week trade activity.
FEEDER CATTLE:
Feeder cattle futures rallied higher in late day buying following moderate to strong losses during morning trade. Following aggressive triple digit gains Tuesday as traders returned from the holidays and entered 2024, the initial focus on position taking developed. Traders also became concerned with the active early losses in stock prices, which created concerns about the future strength of the economy. Once initial pressure eased, buyers slowly but steadily stepped back into feeder cattle trade, helping push nearby contract to light to moderate gains at the closing bell.
January feeders closed $0.65 higher at $226.075, March feeders closed $0.58 higher at $227.025 and April feeders closed $0.40 higher at $232.55. The CME Feeder Cattle Index for Dec. 29: down $3.14, $225.05.
LEAN HOGS:
Lean hog futures regained a small sense of market composure on Wednesday with prices mixed in a generally narrow trading range following significant losses recorded over the past couple of weeks. After setting contract lows once again Tuesday based on production concerns during early 2024, late spring and summer contracts were able to etch out single-digit gains at the end of the trading session. But to move away from triple-digit gains seems like a huge moral victory that could easily bring about increased buyer support over the next few days or weeks. Given the still weak fundamental picture of the pork market, it is unlikely that significant rapid gains will develop in the short term, but the ability to stabilize the market during early January may help to rebuild long-term support across the complex.
February lean hogs closed $0.03 lower at $65.3, April lean hogs closed $0.30 lower at $72.2 and May lean hogs closed $0.03 higher at $79.875. Wednesday's hog slaughter is estimated at 483,000 head, 32,000 head more than a week ago and 5,000 head less than a year ago. Pork Cutouts totaled 391.42 loads with 336.77 loads of pork cuts and 54.65 loads of trim. Pork cutout values are down $2.32 at $82.78. The CME Lean Hog Index for December 29: down $0.30, $65.05.
THURSDAY'S HOG CALL: Steady to $1 lower. The underlying weakness of both futures prices and pork values is likely to limit stability and price support in cash prices through the end of the week.
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