DTN Midday Livestock Comments

GENERAL COMMENTS:

Livestock futures are holding mixed trade with strong gains seen in front-month spot markets. The rest of the complex continues to be mixed in a narrow trading range with traders focusing on both commercial and technical market shifts. Corn prices are higher in light trade. March corn futures are 1 cent higher. Stock markets are higher in light trade. The Dow Jones is 122 points higher while Nasdaq is up 29 points.

LIVE CATTLE:

Mixed trade is still seen in live cattle futures. Even though there is additional cash trade developing at higher prices than last week, the overall tone of the market is mixed. Lack of support in outside markets and pressure in beef values is severely limiting deferred buyer activity, keeping prices in a narrowly mixed trade range. Front month February futures continue to hold prices higher with a 72 cent per cwt rally. This support remains unstable given the wide moves over the last few trading session. Cash cattle trade continue to slowly develop with light trade in the North seen at $191 per cwt. This is $1 higher than last week's dressed trade. Although there is no trade seen in the South so far this morning, the expectation that increased activity will need to be seen before the end of the week is helping to support overall markets. Asking prices are at $122 per cwt in the South and $192 to $195 in the North. Beef cut-outs at midday are lower, $0.40 lower (select) and down $0.34 per cwt (choice) with light movement of 66 total loads reported (37 loads of choice cuts, 16 loads of select cuts, one load of trimmings, 13 loads of ground beef).

FEEDER CATTLE:

Strong gains have redeveloped through feeder cattle futures Thursday morning given the lack of support in the grain complex following the USDA crop supply and demand report. There is likely to be some additional underlying buyer activity that has been shaken out of the market over the past few days willing to move back into the market. Nearby contracts are holding gains from 40 to 65 cents per cwt which could help bring additional momentum to the entire complex.

LEAN HOGS:

Front-month February lean hog futures continue to surge higher through the morning, moving to $74.15 per cwt with an 80 cent per cwt rally holding at midday. The focus on gaining access to market ready hog while cash markets are moving higher and pork values remain strong has continued to set contract highs. But the rest of the complex has stalled out following the market surge over the last couple weeks. Additional moderate market shifts are likely to be seen over the near future. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $0.20 at $70.38 per cwt with the range from $68.50 to $73.00 on 6,400 head reported sold. Cash prices are higher on the Iowa Minnesota Direct morning cash hog report. The weighted average price added $0.48 at $71.95 per cwt with the range from $68.75 to $73.00 on 3,265 head reported sold. The National Pork Plant Report reported 155 loads selling with prices falling $0.28 per cwt. Lean hog index for 2/6 is at $71.45 up $0.50 with a projected two-day index of $72.19 up $0.74.

Rick Kment can be reached at rick.kment@dtn.com

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