Wednesday Closing Livestock Market Summary - Mixed Trade Leaves Livestock Markets Directionless

GENERAL COMMENTS: Livestock futures saw narrow moves at the end of trade Wednesday as traders tested market direction. Live cattle futures hit long-term resistance at $130.10 per cwt, but pulled back on limited buyer support. Meanwhile, nearby lean hog futures held recent support on firm commercial interest. Cash cattle activity was sluggish again Wednesday with asking prices holding at $130 and higher live basis and $205 to $206 dressed. A few scattered bids developed through the day, but there is still a wide gap that needs to be closed before any business gets done. Bids Wednesday were offered at $125 live and $202 dressed. The National Daily Direct afternoon hog report was $0.04 higher ($42.50-$46, weighted average of $45.27) on 20,620 head sold. Corn futures were lower in light activity with March down 2 cents per bushel. The Dow Jones Index was 72 points lower with the Nasdaq up 2 points.

LIVE CATTLE: Live cattle futures moved in a narrow range, testing long-term resistance levels. Futures settled mixed, $0.17 lower to $0.20 higher. After testing year-long resistance at $130.10 per cwt in morning trade, the April contract moved to that level, but was unable to break through the ceiling. Market support is expected to test these price levels before the week is over. Beef cut-outs: lower, down $0.94 (select, $212.79) to down $0.21 (choice, $219.46) with light demand and moderate offerings, 128 loads (78 loads of choice cuts, 19 loads of select cuts, 11 load of trimmings, 21 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL: Steady. Despite the development of a few scattered bids midweek, the cattle market remains quiet with little indication active trade will develop until late in the week again.

FEEDER CATTLE: Light gains developed in feeder cattle futures Wednesday as traders focused on limited news and firm market support in live cattle. Futures closed $0.15 to $0.45 higher. Weakness in the grain markets combined with firm deferred support in live cattle trade to help stimulate buyer support in nearby feeder cattle trade. April led the complex higher with a 45-cent gain, as traders look for underlying support through the end of the week. CME cash feeder index for 2/26 is $140.46, up $0.16.

LEAN HOGS: Lean hog futures closed mixed ($0.52 lower to $0.40 higher) after trading in a narrow range Wednesday. Firm pressure early in the session was short-lived following the inability of traders to break through initial support levels seen early in the week. This allowed renewed buyer support to step back into the complex, moving several nearby contracts 27 to 40 cents higher. Despite continued concerns of burdensome hog supplies and building pork stocks, current prices are unable to attract traders willing to sell. Pork cutouts weakened once again, as wholesale pork prices continue to move sharply higher and lower through the last couple of weeks. Pork cutout values fell $1.39 per cwt, moving to $59.57 per cwt on 353 loads. CME cash lean index for 2/25 is $52.85, down $0.28. DTN Projected lean index for 2/26 $52.82, down $0.03.

THURSDAY'S CASH HOG CALL: Steady to $1.00 lower. Active cash buying has developed over the last two days, putting even more pressure on cash markets as packers continue to fill needed procurement slots with ease. Most bids are expected to be steady to 50 cents lower early Wednesday. Thursday slaughter is expected at 477,000 head. Saturday runs are expected near 195,000 head.

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Wednesday Midday Livestock Market Summary - Hog Futures Shift Higher Late Morning

General Comments

Limited activity was seen through the entire livestock complex with lean hog trade shifting $1.50 per cwt from session lows as buyers have moved back into the complex. Cattle trade has wandered in a narrow to moderate range through most of the morning with mixed trade still keeping traders cautious Wednesday morning. Corn futures are lower in sluggish trade. March corn futures are 1 cent lower. Stock markets are lower in light trade. Dow Jones is 117 points lower with Nasdaq down 20 points.

LIVE CATTLE:

Limited activity is holding in live cattle trade. Traders are closely watching the moves in April live cattle trade, which have hit, but were unable to break through long-term resistance levels of $130.10 per cwt set in February 2018 on the continuous chart. A shift above this level will likely spark renewed market support over the near future, and could set additional buying activity in motion. April futures are holding steady at $129.92 per cwt, with little incentive to push prices lower at this point. Cash cattle bids are starting to develop through the morning as packers have became slightly more active given the underlying support in futures trade. Live bids of $125 are seen in the South, while dressed bids at $202 are holding in the North. It still may be late in the week before deals are reached as both sides are expected to hold to their position. Asking prices remain at $130 and higher live and $205 to $206 dressed. Boxed Beef cut-outs at midday are mixed, $0.67 lower (select) and up $0.18 per cwt (choice) with light movement of 77 total loads reported (40 loads of choice cuts, 10 loads of select cuts, 9 loads of trimmings, 17 loads of ground beef).

FEEDER CATTLE:

Feeder cattle trade remains stuck in a narrow trading range with limited interest developing Wednesday. Prices are hovering from 20 cents lower to 20 cents higher with very light support seen in nearby trade following live cattle futures test of long term resistance levels. Feeder cattle trades are focusing on the limited pressure in corn markets, but most interested in the ability of April live cattle futures to break through 2018 highs of $130.10 per cwt.

LEAN HOGS:

Buyer support is slowly attempting to redevelop in nearby lean hog trade with traders shaking off early market losses. Nearby contracts have traded in a wide range through the morning, moving $1.50 per cwt off initial lows. This continued support is adding confidence to the market, which still struggles with weak fundamentals based on uncertain demand growth. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $0.03 at $45.26 per cwt with the range from $42.50 to $46.00 on 12,295 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $0.02 at $45.43 per cwt with the range from $42.50 to $46.00 on 6,805 head reported sold. Pork carcass values posted additional market pressure as wholesale pork markets continue to swing back and forth in a wide range. Pork cutouts fell $2.35 per cwt at $58.61 per cwt with 208 loads traded. Lean hog index for 2/25 is $52.85, down $0.28, with a projected two-day index is unavailable at this time.

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Wednesday Morning Livestock Market Summary - Follow-Through Buying Expected

GENERAL COMMENTS:

Cash cattle business continues to focus on limited trade direction with bids still undeveloped. Although asking prices are starting to become more available as the week continues, this may still not spark trade until late in the week. Even though packers remain short-bought, the lack of interest is likely to limit additional direction Wednesday, although a few bids may slowly develop. Futures trade is expected to continue to show market firmness, although with April contracts bumping up against the $130 per cwt level, there may be some resistance levels to move above these prices through the end of the month. If prices can hold contract highs through the end of the month, this would be a significant boost, potentially sparking even more activity through the upcoming weeks.

With packer runs expected to move back to regular, full speeds through the end of the week, the job to continue to pick up additional market-ready hogs will likely be a simple task. Bids are expected to once again develop from steady to $1 per cwt lower, although most bids are likely to be 50 cents lower through most of the morning. Futures trade is expected to remain higher, although moderate position-taking is expected to move back into the market following the strong Tuesday gains. Even though the complex still remains weak, and near support levels, the potential to bring buyers back into the market through the end of the week could help spark buyer activity during the Wednesday session.

	BULL SIDE		BEAR SIDE
1)	Nearby contracts continue to set contract highs with April futures testing $130 per cwt resistance levels. Moves above this level could spark additional buyer activity through the entire complex.	1)	Continued cold weather is still blanketing most of cattle country, creating feeding challenges and limiting overall gains and efficiency. Weather premiums have not been fully working through price support the last several weeks, allowing significant production costs for feeders.
2)	Feedlot managers continue to focus on firming futures trade and recent beef value gains in the wholesale market. This has elevated asking prices. It is likely that feeders will not back away from these prices until late in the week, even then, they may decide not to fold, leaving limited trade once again this week.	2)	Select boxed beef cuts posted firm pressure Tuesday, creating underlying concerns that follow-through meat price support may be starting to erode through the end of the month.
3)	Strong gains in lean hog futures Tuesday has sparked renewed life through the hog complex, with prices bouncing over $3 per cwt over early-week lows. This shift higher, may be able to spark some additional long-term buyer support through the entire market.	3)	Sharp cash hog losses developed Tuesday with prices falling $1 per cwt in the afternoon cash sales report. Extremely active trade developed Tuesday, with sales nearly double levels typical seen in daily trade.
4)	Even though there are no new details in U.S.-China trade talks, the expectation that something will get done and it will have a positive impact on the pork market, is helping to give the market a sense of hope for long-term stability.	4)	The tone of the lean hog complex remains weak with prices still near support levels, and traders are uncertain if a one-day bounce is enough to spark consistent change through the entire complex.

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Tuesday Closing Livestock Market Summary - Traders Push Hog Futures Higher

GENERAL COMMENTS: Strong support quickly moved into livestock trade Tuesday with triple-digit gains developing in both cattle and hog futures. This may add some uncertainty through the end of the week, as hog futures moved off support levels as traders look for any hint of long-term buyer interest. Cash cattle bids were undeveloped Tuesday due to a lack of packer interest at this point. A few initial asking prices were floated across the market with live cattle priced at $130 and higher, while dressed trade was at $206 and higher. End-of-the-week trade is expected to be seen again unless a major shift in futures trade develops. The National Daily Direct afternoon hog report was $1 lower ($42.75-$46.65, weighted average $45.29) on 14,517 head sold. Corn futures were lower in light activity with March down 4 1/4 cents per bushel. The Dow Jones Index was 33 points lower with the Nasdaq down 5 points.

LIVE CATTLE: Early mixed trade gave way to strong gains in nearby contracts with February leading the complex higher. Futures closed $0.25 to $1.02 higher. The February contract continued to shift higher as traders try to get out of the complex with contracts in delivery and nearing expiration. The April contract gained 70 cents, nearing the $130-per-cwt level with a close at $129.92 per cwt, setting a new contract high in nearby trade. Continued movement through this level would likely spark renewed buyer support, although the air seems to get thin at these price levels. Beef cut-outs: mixed, $0.84 lower (select, $213.73) to up $0.12 (choice, $219.67) with good demand and light offerings, 134 loads (82 loads of choice cuts, 27 loads of select cuts, 9 load of trimmings, 15 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL: Steady. Markets are expected to be quiet once again Wednesday morning. Limited asking prices are seen, but this is enough to set the initial price levels, although packers are unlikely to show bids in the near future.

FEEDER CATTLE: Feeder cattle futures saw strong gains of $0.32 to $1.12 as traders focused on the eroding grain trade. The combination of higher feeder cattle prices in the Oklahoma City market Monday and strong pressure in corn and soybean markets resulted in firm buyer support despite limited early trade volume. April led the complex higher, moving to $146.77 per cwt following a $1.12-per-cwt rally. Cattle futures testing the $130 level points to some additional underlying support in the complex. CME cash feeder index for 2/25 is $140.33, down $0.09.

LEAN HOGS: Lean hog futures saw sharp gains of $0.15 to $1.82 as traders backed away from early pressure on a lack of market news. No new direction is seen in cash markets, and long-term concerns remain about the ability to build pork demand. Nevertheless, traders stepped in front of the market, looking for increased market support through the end of the month. It remains to be seen if this support will hold, but traders seem to be distancing themselves from support levels of just under $53 per cwt. Pork cutouts stabilized Tuesday following several days of back-and-forth swings. Pork cutout values added $0.04 per cwt, moving to $60.96 per cwt on 436 loads. CME cash lean index for 2/22 is $53.13, down $0.52. DTN Projected lean index for 2/25 $52.85, down $0.28.

WEDNESDAY'S CASH HOG CALL: Steady to $1.00 lower. Packers are getting back into a more regular routine as hogs are moving to plants following the weekend storms. This is just in time for additional snow that is expected at the end of the week, while cold weather is expected to continue over the next couple of weeks. The focus on catching up from previous slower plant runs leaves excess hogs available at packers' disposal. Wednesday slaughter is expected at 477,000 head. Saturday runs are expected near 195,000 head, but are dependent on weather.

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