DTN Midday Livestock Comments          01/23 11:53

   Hog Futures Erode Wednesday Morning

   Sharp losses developed across lean hog trade with traders focusing on 
limited buyer activity through the entire complex as prices break through 
support levels.

By Rick Kment
DTN Analyst

General Comments

   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. 

   LIVE CATTLE:

   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:

   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 rick.kment@dtn.com 


(CZ)

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