DTN Midday Livestock Comments          01/18 12:50

   Gains Sweep Through Hog Futures

   Active buyer support quickly moved into the lean hog complex Friday morning. 
With spring and summer hog futures posting $2 to $2.70 per cwt gains at midday, 
limit market gains are still possible.

By Rick Kment
DTN Analyst

General Comments

   Active support has flooded into lean hog futures trade with April through 
June contracts posting gains above $2 per cwt. April contracts are flirting 
with limit gains with prices currently $2.70 per cwt higher. Cattle trade is 
mixed to mostly higher as traders try to cover short positions in front of the 
long weekend, as markets will remain closed Monday. Corn markets are higher in 
light trade. March corn futures are 1 1/2 cent higher. Stock markets are higher 
in light trade. Dow Jones is 283 points higher with Nasdaq up 81 points. 

   LIVE CATTLE:

   Mixed trade is seen late Friday morning as market activity is limited and 
most prices have shifted higher in light to moderate activity. There is growing 
support in all spring and summer contracts, although gains have been limited to 
10 to 40 cents per cwt in most contract months. The overall support through the 
market may add firmness to trade when traders move back into the market next 
week Tuesday. Cash trade bids are seen in a few areas midmorning with live bids 
holding at $122 per cwt while dressed bids are at $195 in Nebraska. This a 
moderate pullback from bids earlier in the week, although current bids are 
still a long way from asking prices. Even though asking prices are not as firm 
as previous days, feedlot managers are likely to be unwilling to ratchet prices 
lower at this point. Current asking prices are seen from $127 to $130 live and 
$200 and higher dressed. Boxed Beef cut-outs at midday are higher, $1.95 higher 
(select) and up $0.37 per cwt (choice) with light movement of 47 total loads 
reported (23 loads of choice cuts, 10 loads of select cuts, no loads of 
trimmings, 14 loads of ground beef). 

   FEEDER CATTLE:

   Light buyer activity is slowly resurfacing in feeder cattle trade following 
the sharp triple-digit losses Thursday. Limited volume is seen through the 
morning as traders prepare for the extended weekend, as markets will remain 
closed Monday. This move higher is not expected to break away from the previous 
pressure and overall weaker tone of the complex, but could help to give some 
hope that market stability is being sought by traders Friday.

   LEAN HOGS:

   Sharp gains have quickly swept through the complex Friday morning following 
limited initial trade. Similar to the last couple of trading sessions, it is 
expected that overall volume will remain light Friday, but traders may still 
focus on increased underlying support through the entire complex. This may add 
even more volatility to the complex as April futures are swiftly progressing 
toward limit gains with prices currently $2.75 per cwt higher. A close with 
limit gains would create even more volatility to the market, allowing expanded 
trading limits Tuesday when markets reopen. With an extended gap for traders to 
assess market direction over the next couple of days, this may add uncertainty 
to the market. Cash prices are higher on the National Direct morning cash hog 
report. The weighted average price is up $0.23 at $51.63 per cwt with the range 
from $46.00 to $53.00 on 3,527 head reported sold. Cash prices unreported due 
to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork 
carcass values are lower on the morning report with prices slipping $0.51 per 
cwt at $69.59 per cwt with 127 loads traded. Lean hog index for 1/16 is $58.18, 
up 0.16, with a projected two-day index is unavailable at this time.

   Rick Kment can be reached at [email protected] 


(CZ)

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