Live Cattle			Feeder Cattle			Lean Hogs
LCZ9	86.25	+0.55	FCX9	95.375	+0.70	LHZ9	57.80	+0.25
LCG0	87.375	+0.35	FCF0	96.70	+1.425	LHG0	64.325	-0.20
LCJ0	89.725	+0.475	FCH0	96.70	+0.70	LHJ0	67.90	+0.05
			Index	93.08	+0.03	Index	54.00	+0.11

 

 

 

Live cattle closed higher on the day. Support came from cash trades that were steady in Nebraska from week ago figures. This was considered friendly since futures were holding a discount and some were calling for a lower cash trade. Midday boxed beef was lower with Choice at 141.47 down .38 and Select at 135.94 down .52. Further pressure may be from the 2-week weather forecast showing favorable conditions for cattle.

 

 

 

 

 

Feeders closed higher on the day. Most active January led the way with triple digit gains. Today’s strength was the opposite of yesterday and closes near the high of the day will be positive for tomorrow. Cash feeders are mostly steady to higher, while the grain market finally traded lower today. A large break in corn could result in further strength for feeders, yet the grain market has been very unpredictable of late.

 

 

Direct hog markets were higher with the IA/So.MN direct market at $55.10 up 2.76; Western cornbelt $55.25 up 2.53; Eastern cornbelt $51.16 up .10; and the National average at $53.94 up 1.78

 

Pork cutout; loins -.10, hams +.49

 

Lean hogs closed higher on the day. Cash hogs sharply higher today to give support, otherwise comments remain unchanged. The hog market has yet to show any real weakness during the past couple of weeks thanks to the firm cutout (ham) prices. The cutout is approaching $60, however, traders are becoming more cautious with outlooks after the “holiday” buying and noting that seasonals typically show a declining market. The $60 price for hams may be resistance; just as the $40 level was strong support. However, heavy sellers remain on the sidelines waiting for bearish news to surface, which has been hard to find. Just to note there is a story that confirms a commercial herd in Indiana has the H1N1, yet I do not believe this will greatly affect the market. 

 

Slaughter figures are beginning to suggest that hogs have worked through the biggest glut of market ready hogs. A decreasing slaughter in the weeks ahead will be supportive. 

 

 The trend continues to look higher, but futures should have limited upside as futures now hold premiums over the CME index and technicals will begin showing overbought signals. Keep a close eye on December shorts (57-58) and possibly place protective stops. Another possibility to get short hogs without being outright is to bear spread lhz9/lhj0 (-9.40 to – 8.80). Call to discuss.

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