Wide price shifts have quickly developed Wednesday morning following a quick turn lower in lean hog trade. This sparked additional liquidation, moving April futures nearly $2 per cwt lower. Feeder cattle futures are leading the cattle complex higher with March futures $2 per cwt higher in limited volume. Corn markets are mixed in light trade. March corn futures are 1/4 cent lower. Stock markets are lower in light trade. Dow Jones is 11 points lower with Nasdaq down 47 points.
Sharp triple-digit gains in feeder cattle futures have quickly brought about renewed futures market trade as traders try to adjust to the renewed support developing in the last half of January. Although gains are moderate at best through the morning, there is increased focus on the ability to bring additional trade volume back to the table with traders covering short positions from Tuesday's trade. The focus on stable beef demand and higher feeder cattle prices is kindling additional buyer support through the market. Cash cattle interest is slowly improving through the morning following stability in futures trade. A few token bids have entered the market at $122 live basis in the South and $196 dressed basis. Asking prices have developed at $126 and higher live and $200 dressed. It is expected that cash business will not develop until later in the week, potentially Friday. Boxed Beef cut-outs at midday are mixed, $0.16 lower (select) and up $0.40 per cwt (choice) with moderate movement of 87 total loads reported (45 loads of choice cuts, 12 loads of select cuts, 9 loads of trimmings, 22 loads of ground beef).
Feeder cattle futures have quickly turned around with March contracts leading the renewed support as prices have surged $2.22 per cwt through morning trade. Although there still remains uncertainty concerning the overall direction cattle markets through early 2019, the potential to build on recent market lows and spark additional buyer activity through the entire market could bring about stability in the soft feeder cattle complex.
LEAN HOGS: Sharp losses have quickly flooded through lean hog trade with triple digit losses seen from April through August contracts. April futures are sparking increased underlying weakness with contracts breaking through support levels seen last week, and sparking additional bearish market moves as traders focus on liquidation. With prices moving below $65 per cwt in April contract, additional late day pressure is likely. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.03 at $52.06 per cwt with the range from $48.00 to $53.00 on 4,736 head reported sold. Cash prices lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $0.41 at $51.88 per cwt with the range from $49.25 to $53.00 on 1,636 head reported sold. Pork carcass values are lower on the morning report with prices slipping $0.08 per cwt at $69.55 per cwt with 191 loads traded. Lean hog index for 1/21 is $58.33, up 0.26, with a projected two-day index is $58.58, up 0.25.
Rick Kment can be reached at firstname.lastname@example.org
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