Despite firmness seen in early morning activity and sluggish moves in live cattle and hog futures, the feeder cattle market has returned to firm losses as traders focus on potential market weakness in the coming days.
Follow-through pressure has developed in feeder cattle markets Friday morning as the complex still carries a weak undertone. This may spark additional uncertainty through the rest of the week, and into next week. Mixed trade in the rest of the complex is limiting overall market direction at the end of the week.
Corn prices are higher in light trade. March corn futures are 1 cent per bushel higher. Stock markets are higher in light trade. The Dow Jones is 94 points higher while Nasdaq is up 42 points.
Live cattle futures remain mixed in a moderate trading range in most contract months. Firming support in front month December contracts is setting the tone for any support left in the market at the end of the week. The focus on additional pressure in deferred contracts and softness in feeder cattle trade is driving additional pressure to the market.
Cash cattle markets appear to be done for the week with bids undeveloped Friday following the light to moderate trade that trickled into the market over the last three days. With prices falling $3 to $4 per cwt from last week, both sides appear to be good with the idea of waiting until next week before revisiting the cash cattle market. A few clean-up deals may develop, but that is becoming more unlikely as it gets later in the day.
Beef cut-outs at midday are higher, $1.92 higher (select) and up $0.47 per cwt (choice) with active movement of 126 total loads reported (60 loads of choice cuts, 12 loads of select cuts, 27 loads of trimmings, 27 loads of ground beef).
Follow-through pressure has developed across feeder cattle markets midday Friday despite the attempt to spark additional buyer support early in the session. The general lack of trade activity and concern that most buyers will not become aggressive over the near future led prices 60 to 80 cents per cwt lower at midday. This may bring about additional late-day liquidation even though trade volume remains sluggish.
Mixed trade has developed Friday in a narrow to moderate range at midday following the overall lack of consistency in both fundamentals and outside markets over the last couple of days. Even though recent pressure has developed in futures trade through the week, there is growing support in pork values with strong triple digit support seen in the morning report.
This is leaving futures trade very directionless with nearby contracts trading in a mixed range from 20 cents lower to 30 cents higher. Choppy and inconsistent trade direction is likely to be seen through the end of the session.
Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.14 at $59.06 per cwt with the range from $53.00 to $60.00 on 2,405 head reported sold.
Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $0.58 at $58.92 per cwt with the range from $53.00 to $60.00 on 379 head reported sold.
The National Pork Plant Report posted 153 loads selling with carcass values gaining $1.38 per cwt. Lean hog index for 12/06 is at $65.30 up $0.45 with a projected two-day index of $65.48, up $0.18.