Friday Midday Livestock Market Summary - Strong Pressure Redevelops Across Hog Futures

General Comments

Lean hog futures have posted sharp losses with triple-digit price losses seen in all nearby contracts Friday. This has continued to weaken the overall tone of the complex, which has turned bearish through the week. Mixed trade is holding in live cattle futures with nearby live cattle futures sustaining narrow gains, but being offset by deferred contract losses. Corn markets are higher in light trade. March corn futures are 1 3/4 cents higher. Stock markets are higher in light trade. Dow Jones is 161 points higher with Nasdaq up 84 points.

LIVE CATTLE:

Mixed trade has held in live cattle trade despite feeder cattle prices eroding and the overall lack of support in the limited cash business that has been seen so far through the morning. Nearby contracts are holding narrow to moderate gains with February futures leading the market higher with 35 cent gains. Deferred futures are holding moderate losses of 20 to 40 cents per cwt, with very light activity expected through the last hour of trade. Cash cattle business is starting to slowly develop in the North with live prices in western Nebraska and Colorado seen at $123 per cwt, which is $1 per cwt lower. Dressed business has been seen at $197 per cwt, fully steady with last week. Southern trade is still silent, with bids of $122 to $123 per cwt. These bids are being passed by feedlot managers with asking prices holding near $126 per cwt midday Friday. Boxed Beef cut-outs at midday are mixed, $0.15 higher (select) and down $0.35 per cwt (choice) with light movement of 63 total loads reported (39 loads of choice cuts, 8 loads of select cuts, no loads of trimmings, 16 loads of ground beef).

FEEDER CATTLE:

Firm losses have quickly moved into feeder cattle trade Friday morning following the inability for buyers to move back into the complex. Prices held narrow losses through most of the morning, but traders started to focus on position taking in the last couple hours of trade, allowing for increased overall selling activity to move back into the complex. This may spark some last minute market shifts before closing bell.

LEAN HOGS:

Sharp triple-digit losses have quickly and aggressively moved back into the lean hog complex with nearby contracts hovering from $1.40 to $1.70 per cwt. There is increased overall underlying bearish tones moving into all lean hog futures following the breakthrough nearby support levels. Currently April lean hog futures are trading at the lowest price since August 2018. Current prices are still nearly $3.50 per cwt above summer 2018 lows, which at this point, it appears that prices may not erode that quickly over the near future. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.03 at $51.44 per cwt, with the range from $46.00 to $52.19 on 5,422 head reported sold. Cash prices lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $1.10 at $50.51 per cwt, with the range from $47.00 to $52.00 on 1,116 head reported sold. Pork carcass values are lower on the morning report with prices added $0.82 per cwt at $68.09 per cwt with 142 loads traded. Lean hog index for 1/23 is $58.50, down 0.08, with a projected two-day index is $58.50, unchanged.

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Friday Morning Livestock Market Summary - Cattle Futures Look Cash Trade Development

GENERAL COMMENTS:

Packer interest should start to show more early Friday with bids expected to be in similar ranges as the last couple of days, but the ability to gain access to cattle is likely to move prices steady with last week at the least, unless there's a major turnaround in futures trade. Early bids are expected to be at $122 live and $196 dressed, although asking prices will remain firmly higher at $126 to $128 live, and $200 and higher dressed. It may be late afternoon before the majority of cash market activity develops. Futures are expected mixed to firm with follow-through support stepping into both feeder cattle and live cattle trade. The possibility of end of the week position-squaring is likely to bring about moderately mixed trade at times on Friday.

Firm pressure is expected to continue through the lean hog trade until the end of the week, although given the downward price shift, and the fact that Fridays can sometimes break away from the general tone of the market due to end of the week positioning, there may be an attempt to cover short positions by some in the market. This may allow for mixed trade later in the session, even though the general tone of the market is expected to remain weaker heading into the weekend. Cash market activity is expected steady to $1 per cwt lower, although most bids are expected steady to 50 cents lower. Slaughter runs at the plant are likely to hit 465,000 head Friday, with an estimated Saturday run of 212,000 head.

BULL SIDE	BEAR SIDE
1) Feeder cattle futures have rallied $3 per cwt in April futures through the holiday-shortened week. This is setting the tone to spark additional commercial buyer support through the feeder cattle complex.	1) Limited interest in cash cattle trade through the week is setting up for what could be a generally steady cash trend compared to last week. This may add even more uncertainty as the overall cash prices have been able to move significantly through the month of January.
2)Even with no direction in cash cattle trade through the tail end of the week, beef cutout values have started to rebound. This is helping to instill positive market expectations through the end of January that additional fundamental support may develop.	2) Strong gains in feeder cattle futures have been met with lackluster interest in the live cattle trade. The desire and focus on additional pressure developing through the end of the week in nearby live cattle trade is likely to limit end of the week price support.
3)Despite the pullback in pork cutout values, packer margins have started to improve through the end of the week. This may help to bring about increased overall support through the complex in the next couple of days.	3) Sharp losses in pork cutout values have sparked additional fundamental concerns through the entire hog complex. Pork cutout values have fallen steadily through most of the week with prices eroding nearly $3.50 per cwt the last three days.
4) Firm summer premiums continue to hold even with concerns about longer-term hog supplies and overall uneasiness concerning the ability to sustain strong pork demand. July futures continue to hold a $20 per cwt premium over spot-month February contracts.	4)Cash market weakness is expected to develop Friday as packers try to limit spending and protect plant margins in light of falling lean hog futures trade and eroding pork values. This may lead to general weakness through the end of the week.

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Thursday Closing Livestock Market Summary - Hog Futures Erode on Strong Supplies

GENERAL COMMENTS: Strong losses in lean hog futures Thursday put bearish pressure on the entire complex. Live cattle trade remained mixed in limited volume despite strong gains in feeder cattle futures. Cash market direction was limited even though a few cattle were sold in Iowa at $195 to $196 per cwt. At this point, Thursday's trade is not enough to establish a trend. However, bids have been seen in the $195- to $196-per-cwt range dressed and $122 live. Packer interest is expected to improve on Friday. Asking prices are holding at $126 and higher live and $200 dressed. According to the closing report, the national hog base is $0.68 lower ($47-$53, weighted average $51.58). Corn futures are mixed in light activity. March futures were 1/4 cent lower. Dow Jones Index is 171 points higher with Nasdaq up 5 points.

LIVE CATTLE: The live cattle market stabilized Thursday with futures closing mixed, $0.20 lower to $0.35 higher. Nearby contracts trickled lower following widespread losses in hog trade as well as outside market pressure that may affect short-term movement of beef products. Deferred futures were heavily influenced by renewed support moving into feeder cattle trade. More late-week support could surface Friday. Beef cut-outs: higher, up $0.10 (select, $212.14) to up $0.54 (choice, $217.75) with light demand and moderate offerings on a total of 124 loads (74 loads of choice cuts, 16 loads of select cuts, 12 load of trimmings, 22 loads of coarse grinds).

FRIDAY'S CASH CATTLE CALL: Steady. Both sides seem resigned to another late-Friday trade schedule. Bids are expected to redevelop near $122 live and $196 dressed, but packer interest should improve through the morning. Asking prices will likely remain firm during most of the day.

FEEDER CATTLE: Feeder cattle futures were $0.15 to $0.75 higher on increased buyer activity. Feeder cattle futures, which have been severely beaten down during the first three weeks of 2019, have regained some life with prices rallying over $3 per cwt as traders try to focus on longer-term support and continued firmness in the live cattle trade. CME cash feeder index for 1/23 is $142.24, up $0.66.

LEAN HOGS: Lean hog futures were $0.40 to $1.35 lower as market pressure continued the last half of the week. Futures have broken through both short- and long-term support levels the last two trading sessions. Even though cash values seem to have held up generally well through January, concerns about pork demand have led to increased liquidation through the complex. Pork values have continued to erode with losses in all primal cuts except ribs. Pork cutout values fell $1.43 per cwt, moving to $67.27 per cwt, on 343 loads. CME cash lean index for 1/22 is $58.58, up $0.25. DTN Projected lean index for 1/23: $58.50, down $0.08.

FRIDAY'S CASH HOG CALL: Steady to $1 lower. Firm pressure is expected to continue to trickle into cash hog values through the end of the week. Most bids are expected steady to 50 cents lower. Slaughter Friday is expected to hit 463,000 head, with a Saturday scheduled run of 212,000 head.

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Thursday Midday Livestock Market Summary - Continued Pressure Develops in Hog Futures

General Comments

Mixed cattle trade is limiting market activity through live cattle futures Thursday morning following overall uncertainty in cash and wholesale beef direction at the end of the week. Hog futures remain firmly lower with widespread follow through losses sweeping through the complex. Corn markets are lower in light trade. March corn futures are 2 1/4 cents lower. Stock markets are mixed in light trade. Dow Jones is 87 points lower with Nasdaq up 19 47 points.

LIVE CATTLE:

Limited activity is seen through the entire live cattle complex with initial buyer support slowly eroding as the morning continued. This is leaving prices stuck in a narrowly mixed range from 27 cents lower to 20 cents higher. The pressure in nearby contracts is focusing on spillover pressure from hog trade and lack of firm gains in beef and cash cattle market development. While summer and fall contracts are supported by firming feeder cattle trade. Cash cattle trade remains undeveloped and likely will remain that way until sometime Friday. Increased bids are seen in several areas with live bids ranging from $121 to $122 per cwt with dressed bids at $195 to $196 per cwt. Asking prices remain firm at $126 to $127 live and $200 and higher dressed. Boxed Beef cut-outs at midday are higher, $0.66 higher (select) and up $0.66 per cwt (choice) with light movement of 53 total loads reported (16 loads of choice cuts, 9 loads of select cuts, 11 loads of trimmings, 17 loads of ground beef).

FEEDER CATTLE:

Strong early gains have quickly redeveloped Thursday morning with increased buyer activity seen in all nearby contract months. This is adding even more support to the complex which has been under pressure through most of January, as buyers quickly step back into the complex. March futures are leading the complex higher with a rally of 90 cents per cwt. All nearby feeder cattle contracts are stuck in a narrow range, eliminating significant interest in rolling contracts due to very narrow market premiums.

LEAN HOGS:

Firm losses have continued to develop across all lean hog futures trade with April futures once again leading the market lower, posting additional 90-cent losses at midday. April contracts have now eroded nearly $2.50 per cwt in the last three trading sessions, moving through short term support levels and sparking additional liquidation. The concern that additional pressure is developing and may continue to develop in cash and pork cutout trade is adding more fuel to the fire through the week. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.71 at $51.55 per cwt, with the range from $47.00 to $53.00 on 5,611 head reported sold. Cash prices lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $1.80 at $50.63 per cwt, with the range from $50.25 to $53.00 on 2,070 head reported sold. Pork carcass values are lower on the morning report with prices slipping $0.48 per cwt at $68.22 per cwt with 171 loads traded. Lean hog index for 1/21 is $58.33, up 0.26, with a projected two-day index is $58.58, up 0.25.

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