DTN Midday Livestock Comments
Lean hog futures surge toward cash at midday
Feedlot country is generally quiet at midday. Some bids of $120 have been identified in parts of the South. Asking prices are around $114 in Kansas and Texas, and $175 plus in the North.
Significant trade volume could be delayed until Thursday or Friday.
The Fed Cattle Exchange Auction report today listed a total of 5,462 head, with 2,729 actually sold. Most cattle seemed to sell $1-2 higher than last Wednesday. The weighted average was 121.98, up from last week's weighted average of 120.52. According to the midday report, the national hog base is 0.29 lower compared with the Prior Day settlement ($61.74-64.50, weighted average $62.70). Corn futures are several cents higher at this time in a slow, largely featureless trade. The stock market is higher at midday with the Dow trading at a new record high (i.e., 20,059, up 147). The Nasdaq is currently 40 points higher.
LIVE CATTLE:
Although live contracts have spent some time in the green this morning, prices are moderately lower as we move into the final trading hour of the day. The trade remains cautious, stalling before the development of late week cash and Friday's release of the January 1 on feed report. Beef cut-outs are mixed at midday, up $1.04 (select, $189.21) to off 0.17 (choice, $191.57) with light to moderate box movement (44 loads of choice cuts, 9 loads of select cuts, zero loads of trimmings, 18 loads of coarse grinds).
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
FEEDER CATTLE:
Feeder issues are mostly lower at this time with only spot January posting modest progress. With deferred live contracts drifting lower, feeder traders just don't have much to hitch their wagons on. Beyond January, contracts range from 22 to 82 lower.
LEAN HOGS:
After ignoring cash premiums for weeks, lean hog futures are suddenly running to the milk at midweek. Prices currently range from 57 to 245 higher with nearbys smoking deferreds. The new buying energy seems tied bull spreading, signs of improving pork demand, and stubborn cash premiums. The carcass value at midday is marked more than a buck higher with all primals quoted higher except the loin.
Pork cut-out: $82.53, up $1.09. CME cash lean index for 01/23: 67.20, up 0.17 (DTN Projected lean index for 01/24: 67.73, up .53).
John A. Harrington can be reached at john.harrington@dtn.com
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