In this file:



Southern feedlots ask $130 live, futures market frets over beef demand, signs of soft cash pork demand weigh on cash hogs and hog futures





DJ MARKET TALK: No Cattle Bids Yet, Late-Week Trade Expected

DJ/ - Jan 8, 2013


9:01 EST - No cash cattle bids have been established yet, and they may remain absent until near midday tomorrow since trading will likely occur late in the week. Cattle owners are asking $1.30 or more a pound on a live basis. Last week's sales occurred at mostly $1.28/lb in Texas and Kansas, up 1c from the previous week. In Nebraska, live sales were from $1.28-$1.285, up 1c, and dressed sales were at mostly $2.05/lb, up 2-3c...





DJ MARKET TALK: Beef Demand Anxiety Likely Weighs on Live Cattle

DJ/ - Jan 8, 2013


9:35 EST - Live cattle look to be extending yesterday's declines, as traders who were looking for higher demand signals failed to see any materialize in the cash or wholesale markets for beef and cattle. Profit-taking ahead of any cash news may pressure live-cattle futures. Feb cattle recently up 0.1 cent, or 0.1%, to $1.3331/lb in electronic trading. Lean hogs are seen higher, despite lower cash bids seen yesterday and early today. This may materialize in hog futures into the open...





Livestock Call By John Otte

Southern feedlots ask $130 live, futures market frets over beef demand, signs of soft cash pork demand weigh on cash hogs and hog futures


John Otte - Farm Futures - January 8, 2013



Fed cattle, lower

Feeder cattle, higher

Lean hogs, steady to higher


Wall Street appears poised to open weak as investors digest corporate earnings reports. In ag Monsanto will report earnings this morning. The Federal Reserve will release data on consumer credit for November this afternoon.


Overnight, fed cattle gave ground, feeders advanced. Hogs traded mixed, with gains in the front months.


Cash fed cattle. USDA reported inactive negotiated cash trade on light demand in all feeding regions Monday.


Cattle owners in Texas and Kansas are asking mostly $130 on a live basis. In Nebraska, asking prices on a live basis are at par with February futures.


If cattle feeders in the south are able to get $130 this week, it would match the all-time cash-market high for live cattle hit in early March 2012. February and April futures prices have built in expectations for new record highs in the cash markets given tightened supplies of slaughter-ready cattle.


An extended tug of war over prices between beef processors and cattle feeders seems likely through winter and early spring as both sides grapple with poor margins. Market participants fret over how much consumers will be willing to pay for beef. Consumers balking at higher prices could erode margins for processors and cattle feeders even further.


Nebraska feedlots responding to a Dow Jones survey are offering 22,000 more cattle than last week. Colorado show lists are up 5,000. Kansas lists are 8,000 head larger. Texas show lists are up 15,000. On balance that's 50,000 more cattle for sale than during last week's holiday shortened negotiations.


On Friday, negotiated cash trade and demand were light to moderate in the Southern Plains. Compared to the previous week, live sales sold $1 higher at $128. Trading and demand were moderate in the Northern Plains, and the Western Corn Belt. Compared to the previous week, in Nebraska live sales were $1 higher at $128, with dressed sales $2 to $3 higher at $205. In Colorado, live sales sold $1 to $2.50 higher at $128 to $130.  Compared to the prior week, in the Western Corn Belt, live sales sold steady to $1 higher at $127 to $129, with dressed sales $2 to $3 higher at $205.


USDA estimated Monday's cattle slaughter at 127,000, vs. 82,000 on New Year's Eve and 128,000 a year ago.


Monday afternoon boxed beef cutout values were steady to weak on moderate demand and offerings. At midday Choice fell $1.06. Select advanced 46 cents. For the day, Choice was down 77 cents at $193.49 with Select up 38 cents at $182.60.  Load count totaled 207.


The latest HedgersEdge packer margin index was minus $55.40 per head compared with minus $50.70 reported the previous day. This is an estimate of packer returns on cattle slaughtered and processed expressed in the form of an index.


Cash feeder cattle. Compared to the last test two weeks ago, Oklahoma National Stockyards reported yesterday's:


Feeder steers $2 to $5 higher.


Feeder heifers $2 to $3 higher.


Steer calves $6 to $10 higher.


Heifer calves $4 to $6 higher.


Demand was very good for all classes following the two week holiday period.  Quality was average to many attractive with several cattle coming off short wheat.  Conditions remain very dry but good chances of rain are in the forecast for midweek...


Bottom line. Cash cattle owners and packers are negotiating in record-high price territory. Concerns that reduced beef output over the holidays could not push wholesale beef prices higher points to demand softness, which could cap both cash and futures rally potential.


Cash hogs. Monday's cash hogs were weak to as much as $2 lower in the western Corn Belt and mostly steady in the eastern half. The pullback in the west occurred after prices jumped there Friday afternoon on surprisingly strong late-week buying interest. Fortunately, western buyers with relatively steady bids bought most of the hogs.


Uncertainty over domestic demand for fresh pork cuts during the balance of January and February also may have contributed to the cautious bids.


Some cutbacks may occur in slaughter schedules this week, mainly by reducing the number of plants that will operate Saturday.


USDA's afternoon reports showed Monday's weighted-average base prices in:


* Iowa-Minnesota dipped 8 cents to average $83.71.


* Western Corn Belt fell 23 to average $83.37.


* Eastern Corn Belt hogs rose 2 cents to average $80.52.


Price changes are compared to USDA's afternoon report for Friday.


Dow Jones estimated Monday's packer margin at minus $4.38 per head, vs. minus $5.44 on Friday.


USDA estimated Monday's hog slaughter at 432,000, vs. 357,000 on New Year's Eve and 428,000 a year ago.


Monday's pork cutout advanced 22 cents to $83.68 on top of Friday's 36-cent gain.


The CME two-day lean hog index, calculated using USDA market data, for Friday was up 49 cents at $83.53. The index is up $1.34 since Dec. 21...


Bottom line. Poor packer margins keep pressure on cash hog prices, which, in turn, pressure hog futures. Until direction of pork demand becomes more clear, hogs will look to other markets, particularly beef, for direction...





DJ MARKET TALK: Cash Hog Prices Predicted Flat-Weak

DJ/ - Jan 8, 2013


8:25 EST - Midwest direct hog markets are predicted flat to weaker amid concerns about sluggish domestic demand for the pork and poor processing margins. Plants that need several more loads of hogs fill slaughter schedules during the second half of the week may pay flat to near flat prices. Those that have most of the animals needed for this week may bid 50c to possibly $1 per hundredweight lower, say livestock dealers. Some packers may trim slaughter schedules later this or next week if pork sales are slow and margins remain thin...





DJ Estimated U.S. Pork Packer Margin Index - Jan 8

DJ/ - Jan 8, 2013


This report reflects U.S. pork packer processing margins. The margin indices

are calculated using current cash hog or carcass values and wholesale pork

cutout values provided by USDA and may not reflect actual margins at the plants.

These estimates reflect the general health of the industry and are not meant to

be indicative of any particular company or plant.

Source: USDA, based on Dow Jones Newswires calculations


  All figures are on a per-head basis.



Date        Standard            Estimated margin

            Operating           at vertically

           Margin Index        integrated operations

                *                    *

Jan 07     $ -  4.38             $ - 11.97





DJ MARKET TALK: US Grain, Soy Edge Up After Mixed Overnight Session

DJ/ - Jan 8, 2013


8:54 EST - US grain and soybean futures are slightly higher following a mixed overnight session. Soybean futures are stabilizing after drifting lower in evening trade, but light profit taking after Monday's gains and outlooks for record South American crops limit advances. Corn and wheat futures are modestly higher, with traders cautious of expanding risk ahead of Friday's closely watched USDA crop reports. Outlooks for tighter US corn supplies and lingering worries about dryness in the Plains are buoying corn and wheat futures...