Cash cattle activity remains at a standstill midweek with bids undeveloped. It is not unexpected that bids have been absent at this point in the week given that Monday was a holiday and overall trade through the week is expected to remain light. But a few token asking prices have been seen in the South with prices of $122 to $125 per hundredweight (cwt). It is likely going to be late Thursday or sometime Friday before active cash trade develops before another long holiday weekend. The Fed Cattle Exchange Auction on Wednesday listed a total of 637 head, with zero actually sold, 637 head listed as unsold, and zero head listed as PO (Passed Offer). The state-by-state breakdown looks like this: KS 160 total head, with zero head sold, 160 head unsold, zero head listed as PO; NE 266 total head, with zero head sold, 266 head unsold, and zero head listed as PO; TX 142 total head, with zero head sold, 142 head unsold, and zero head listed as PO; CO no cattle reported; IA no cattle reported; other states (OK) 69 total head, with zero head sold, 69 head unsold, and zero head listed as PO. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 637 head total, zero head sold; 1-17 day delivery no cattle reported; 10-17 day delivery no cattle reported; 17-30 day delivery no cattle reported. According to the closing report, the national hog base is $0.65 lower compared with the Prior Day settlement ($53.00-$58.50) weighted average $57.29. The corn futures moved higher in light activity. March futures were 1 cent higher Wednesday. The Dow Jones Index is 15 points higher with the Nasdaq up 2 points.
Mixed trade developed across the complex with traders holding prices in a moderate range ($0.47 lower to $0.52 Higher). Lackluster market activity was seen following strong early morning trade. The inability to hold initial gains left the market generally sluggish, although the recent support in the cattle market has pushed prices well off of early lows and is likely to create additional market activity later in the week. Beef cut-outs: lower, $0.41 lower (select, $190.42) and down $1 (choice, $201.60) with moderate demand and offerings (84 loads of choice cuts, 25 loads of select cuts, 1 load of trimmings, 13 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL:
Steady to $2 higher. Cash activity remains undeveloped and likely will remain that way until late in the week. Early activity Thursday will likely see undeveloped bids with packer interest improving through the day. Firm cash market support may be offset by potentially light trade in front of next week's holiday schedule.
Mixed trade was seen at closing bell as initial buyer support slowly eroded through the session ($0.05 lower to $0.77 higher). Strong triple-digit gains developed early in the session, which set the tone for the higher market support. But the aggressive buying activity was not able to hold through the end of the session as lackluster activity pulled markets lower in spring and summer contract months. Even though January futures were able to lead the market higher with a 77-cent-per-cwt gain, the lack of follow-through support left markets slightly unstable. CME cash feeder index for 12/26 is $148.36 down $0.34.
Mixed trade developed midweek following early morning support. The overall tone of the market still remains firm, but the lack of interest allowed for falling prices ($0.50 lower to $0.07 higher). There is increased underlying support due to price rallies seen over the last week. This may help to create additional buyer activity in early January as well as sustain additional market support through the rest of the year. Front-month February futures have posted losses of 50 cents per cwt at closing bell, moving back to $71 per cwt, although the rest of spring and summer contracts continue to trade at a significant premium to the spot-month contract. Carcass values firmed as mixed primal values left the overall pork complex generally firm but unable to show significant support. Pork cut-out: $77.02 up $0.54. CME cash lean index for 12/22 $61.62, down $0.14. DTN Projected lean index for 12/26 $61.59, down $0.03.
THURSDAY'S CASH HOG CALL:
Steady to $1 higher. Firm plant buyer support is expected to redevelop through the end of the week with most bids expected to be steady to 50 cents per cwt higher. Even though the strong follow-through support was not seen in futures trade, there seems to be some indication of additional buying activity through the end of the year. This may help to sustain overall support into early January. Plant runs are expected to be at 465,000 Thursday. Saturday runs are expected to be at 385,000 head.
John A. Harrington can be reached at email@example.com
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