Thursday Midday Livestock Market Summary - Strong Gains Develop in Lean Hog Trade

GENERAL COMMENTS:

Firm pressure is seen in cattle trade Thursday morning continues to slowly but steadily back away from the active early week gains, which flooded into the cattle market Tuesday. There is very little changing at this point in both market fundamentals or technical trading, other than the fact that market volume is returning to a more normal level following the holidays and New Year. This could allow prices to find renewed support over the coming days, but prices may remain unsettled from day to day.

Hog futures have posted active gains, focusing on the oversold status of the complex and bringing buyer interest to the table. March corn is up 1/2 at $4.658 and March soybean meal is down $3.60 at $376.8. The Dow Jones Industrial Average is up 94.77 at 37,524.96.

LIVE CATTLE:

Live cattle futures have softened through Thursday morning trade with nearby contracts holding losses of 40 to 80 cents per cwt at midday. The lack of strong cash and beef market support early in the week has added to buyer concerns over the last couple of days, but the majority of price gains over the last week are still holding which is limiting any significant market liquidation at this point.

Cash cattle markets are quiet Thursday morning following very light trade in the North that developed late Wednesday. Dressed trade in the north sold for $275 per cwt, which is $2 per cwt higher than last week's weighted average. It is likely that additional trade will develop over the next couple of days, but asking prices remain firm at $175 and higher live in the South and $276 and higher dressed in the North.

February live cattle are $0.90 lower at $170.95, April live cattle are $0.60 lower at $174.15, June live cattle are $0.55 lower at $171.425. 

Boxed beef prices are mixed: choice down $1.06 ($276.97) and select up $1.37 ($260.22) with a movement of 90.02 loads (57.20 loads of choice, 13.41 loads of select, 13.31 loads of trim and 6.10 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have seen the most aggressive pressure through Thursday morning with triple-digit losses seen in nearby contracts. Given the aggressive moves higher earlier in the week, this softness is still expected to be focusing on positioning due to the increased market activity in the complex and longer-term price direction. Market shifts in outside commodities and grain trade is also starting to impact overall feeder cattle price shifts, as traders focus on more normal volume over the next couple of weeks.

January feeders are $1.65 lower at $224.425, March feeders are $1.45 lower at $225.575 and April feeders are $1.40 lower at $231.15.

LEAN HOGS:

Lean hog futures are quickly moving higher Thursday morning as traders continue to focus on the oversold status of the lean hog complex. The most aggressive gains are seen in spot month contracts, helping to not only stabilize the market, but bring additional potential buyers back into the market from the sidelines during the next couple of weeks.

February lean hogs are $2.78 higher at $68.075, April lean hogs are $1.65 higher at $73.85 and May lean hogs are $0.80 higher at $80.675. Hog Prices are higher on the Daily Direct Morning Hog report, up $1.34 with a weighted average of $45.54, ranging from $42.00 to $46.00 on 4,544 head with a five-day rolling average of $45.15. Pork Cutouts totaled 217.75 loads with 186.50 loads of pork cuts and 31.25 loads of trim. Pork cutout values are up $1.30 at $83.37.

Thursday Morning Livestock Market Update - Cash Cattle Trade Expected to Take Place

GENERAL COMMENTS:

Traders did not have much direction Wednesday. There was a tug-o-war between the significant decline of cutouts and the prospect of higher cash trade. That will again be prevalent Thursday as choice cutouts took another beating, falling $6.31, with select down just $0.01. There were some cattle traded in Iowa and Nebraska at $275 to $276 dressed, which is $2 to $3 higher than last week. However, sales were limited and may not be a strong indication of overall trade for the week. Business should take place Thursday as packers need to get cattle on the books.

Hog futures ended Wednesday mixed with traders undecided what to do after the large loss Tuesday. Previous support has become resistance and may be difficult to move above with lower cash and cutouts Wednesday. The National Daily Direct Afternoon Hog report showed a decline of $0.25, moving the weighted average to $44.88. Cutouts did not fare well with a loss of $2.32 due to a decline in all categories of cuts. Hog weights increased again last week to 292.5 pounds, up 3.2 pounds from the previous week. This is 2.6 pounds higher than a year ago.

	BULL SIDE		BEAR SIDE
1)	Initial light cash trade increases the potential for higher cash for the week. More active trading should develop Thursday.	1)	The substantial weakness of choice boxed beef cuts may limit cash potential and the desire of traders to buy futures aggressively.
2)	Live cattle futures maintained a close above the previous resistance that was penetrated Wednesday. This level now becomes support and may keep the recent uptrend intact.	2)	International demand needs to improve or more beef will be available to the domestic market.
3)	Hog futures have a lot of negativity already factored in. Any increase in demand, both domestically and internationally, should provide support.	3)	Hog futures were not able to rebound Wednesday, which may indicate the sharp decline Tuesday was not just an aberration, but weakness based on fundamentals.
4)	The fact that liquidation did not continue Wednesday may indicate further downside might be limited.	4)	Increasing weekly hog weights continue to leave packers with plentiful pork supplies. They remain less aggressive in the cash market.

Wednesday Closing Livestock Market Update - Markets Stabilize in Late-Day Trade

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.

Wednesday Midday Livestock Market Summary - Prices Remain Mixed

GENERAL COMMENTS:

Cattle prices backed away from early week gains in both live cattle and feeder cattle futures trade Wednesday morning. Stable to slightly higher grain market prices as well as strong triple-digit losses in the Dow Jones Index has limited follow through buyer support which was very evident Tuesday.

Initial gains in lean hog futures are eroding at midday following the overall softer tone in the livestock market. But it does appear that many lean hog futures traders seem to be content with the current price levels, which could help to establish a market floor during the upcoming month.

March corn is up 1 1/2 at $4.653 and March soybean meal is up $0.90 at $380.4. The Dow Jones Industrial Average is down 228.80 at 37,486.24.

LIVE CATTLE:

Live cattle futures are showing moderate price pressure Wednesday morning with traders adjusting to the sharp early week gains while beef values continue to show price pressure and outside market weakness is developing in the stock market.

February futures are leading the market lower, but the majority of Tuesday's gains are still intact, allowing for potential to bring additional gains back into the market in the last half of the week. Prices are expected to shift within a narrow to moderate range through the rest of the trading session with traders still looking at potential long-term support going into 2024.

Cash cattle activity remains quiet once again although there are scattered bids of $275 per cwt dressed basis in Nebraska. Asking prices have developed around $174 to $174 live basis in the South. Active trade is more than likely to be delayed until sometime Thursday, but there could be some increased sluggish activity over the next few hours.

February live cattle are $1.03 lower at $170.9, April live cattle are $0.53 lower at $173.975, June live cattle are $0.68 lower at $171.25. 

Boxed beef prices are mixed: choice down $2.57 ($281.77) and select up $0.38 ($259.24) with a movement of 78.87 loads (43.88 loads of choice, 18.88 loads of select, 4.10 loads of trim and 12.01 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have adjusted lower through morning trade, although at this point, the market pullback is viewed more as position covering following the aggressive market surge seen Tuesday. The unified movement in cattle trade midweek is allowing traders to focus on potential longer-term market direction as traders try to focus on current positions, but also potential demand shifts expected in the coming weeks.

January feeders are $0.73 lower at $224.7, March feeders are $0.55 lower at $225.9 and April feeders are $0.60 lower at $231.55.

LEAN HOGS:

Lean hog futures have stabilized midweek with prices mixed at midday across the complex. Markets moved higher and lower within a narrow to moderate range through much of the morning. Given the active losses seen over the past week in the lean hog complex and nearby contracts setting contract lows Tuesday, a combination of short covering and repositioning for long-term market price shifts is being done throughout the complex. There still remain concerns about the amount of hogs available to the market and overall demand for pork in the coming months, but the recent market pressure is also leaving prices at a point where the market remains oversold, creating opportunities in the near future for renewed price support.

February lean hogs closed steady, April lean hogs are $0.03 higher at $72.525, and May lean hogs closed steady. Hog Prices are lower on the Daily Direct Morning Hog report, down $3.73 with a weighted average of $44.2, ranging from $41.00 to $47.00 on 1,885 head with a five-day rolling average of $45.83. Pork Cutouts totaled 231.24 loads with 195.56 loads of pork cuts and 35.68 loads of trim. Pork cutout values are down $0.35 at $84.52.