Limited buying is slowly stepping into live cattle and feeder cattle trade midday Thursday. This is creating additional market support through the entire complex.
Firm pressure developed Friday morning through the complex with traders looking for increased underlying pressure in feeder cattle trade. The strength in beef values at the end of the week is being overlooked by traders attention to triple-digit losses in these feeder cattle futures. Limited direction is expected through the rest of the complex with traders looking for additional outside market shifts.
Cash cattle trade still remains quiet although bids are becoming more evident through the morning. Bids are holding at $122 live in the North and South, while dressed bids are developing at $198 to $199 per cwt. This is still a long ways from asking prices, and unlikely to gain interested sellers at this point. Asking prices remain at $126 to $127 live and $202 to $204 dressed. It may be late afternoon before deals are made. Cattle are priced at $126 to $127 per cwt, while dressed prices are listed at $203 to $205 per cwt.
Boxed Beef cut-outs at midday are higher, $1.09 higher (select) and up $0.87 per cwt (choice) with light movement of 58 total loads reported (35 loads of choice cuts, 5 loads of select cuts, 4 loads of trimmings, 14 loads of ground beef).
Triple-digit losses have quickly expanded Friday morning as traders focus on uncertainty in the grain markets and the growing expectations that a deal will develop with China. Any grain market deal with China will be bearish for feeder cattle on a short-term basis at least, as this will likely increase production costs in the entire cattle complex. Even though nearby futures have backed away from session lows, the potential to break below February lows is adding weakness to the complex.
End-of-week short covering has been the main agenda of traders which continue to focus on bearish fundamentals, but are covering positions at the end of the week. With trade closed Monday for Presidents day, the focus on maintaining recent support levels is sparking renewed buyer interest in nearby trade. Nearby futures are holding 30 to 60 cent gains, while narrowly mixed moves in deferred trade is keeping additional volume on the sidelines.
Cash prices are unreported on the National Direct morning cash hog report.
Cash prices unreported on the Iowa/Minnesota Direct morning cash hog report.
Pork carcass values rallied higher on the morning report with prices adding $2.08 per cwt at $64.84 per cwt with 177 loads traded. Lean hog index for 2/13 is $55.24, down $0.31, with a projected two-day index is delayed due to packer submission problems.