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Cash cattle mini-buldge meets soft demand, cash hogs advancing on cutout up moves suggests firm demand, hogs and cattle retreat overnight






DJ Cash-Cattle Traders Eye Beef, Futures for Direction Signals

Curt Thacker - DJ/ - Jan 15, 2013


--No bids reported yet; some expected later in the day or Wednesday


--Late-week trade expected


--Wholesale-beef prices mixed Monday; choice off slightly, select higher


Cash-cattle traders will keep an eye on wholesale-beef prices and the futures markets for possible direction signals pointing to this week's cash trade, which is expected to occur Thursday or Friday.


Beef processors continue to restrict their slaughter schedules due to poor margins and difficulties in getting higher prices for the beef. Projections for this week's slaughter range from around 620,000 to nearly 630,000 head. Last week's slaughter was estimated at 624,000 head.


Cattle owners in Texas are asking $1.29 or more a pound on a live basis for their animals. In Oklahoma and Kansas, cattle are priced at $1.28 or more a pound.


Wholesale-beef prices Monday were mixed, with choice down 15 cents a hundredweight at $194.09 while select rose $1.27 to $184.76 on a total of 170 loads sold...





Livestock Call By John Otte

Cash cattle mini-buldge meets soft demand, cash hogs advancing on cutout up moves suggests firm demand, hogs and cattle retreat overnight


John Otte - Farm Futures - January 15, 2013



Fed cattle, lower

Feeder cattle, lower

Lean hogs, lower


Wall Street appears poised to open steady to weak.


Meats and grains slipped overnight. One driver might be news from Europe that the German economy has finally succumbed to the weakness gripping the rest of the euro zone. Germany's economy contracted in 2012's fourth quarter making it all but inevitable that the euro zone as a whole shared the same fate.


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


Markets may remain quiet until midweek or later before packer buyers and owners begin to negotiate.


Cattle owners are seeking higher prices, asking $129 or more live in Texas and $128 or more in Oklahoma and Kansas. No asking prices have been reported yet in Nebraska, but they are expected to be $205 or more on a dressed basis.


Sales prices declined last week after initial sales in Texas on Tuesday were generally steady or flat with the previous week at $128.


On Friday, negotiated cash trade in the Texas Panhandle was light on light demand. Compared to Thursday, live sales sold steady at $126.


In Kansas, trading was light on light demand. Compared to Thursday, live sales sold steady at $125.


In Nebraska trading was light on light demand. Compared to the previous week, a few live sales sold $3 to $3.50 lower at $125 on a light test. Compared to Thursday, dressed sales sold steady from $201 to $203.


In Colorado, trading was mostly inactive on light demand. Live sales on Thursday sold at $125 with dressed sales trading from $203.50 to $204.


In the Western Corn Belt, trading was light on light demand. Compared to the previous week, live sales sold $2 to $4 lower at $125 on a light test. Dressed sales compared to the previous week sold $2 to $3 lower from $202 to $205 on a light test.


Nebraska feedlots responding to a Dow Jones survey report offering 11,000 more cattle than last week. Show lists are down 4,000 in Colorado, down 3,000 in Kansas and down 5,000 in Texas. That's net down 1,000 head.


USDA estimated Monday's cattle slaughter at 128,000, up 1,000 from a week ago, but same as a year ago.


Monday's afternoon boxed beef cutout values were steady on Choice and higher on Select on moderate demand and offerings. At midday Choice was up 11 cents Select gained 69 cents. For the day, Choice slipped 15 cents to $194.09. Select rose $1.27 to $184.76.  Load count totaled 170.


The latest HedgersEdge packer margin index was minus $62.80 per head, compared with minus $65.10 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 last week, Oklahoma National Stockyards reported Monday's feeder steers and heifers mostly $2 to $5 lower. Steer and heifer calves traded steady with a heavier supply of long-weaned and thin fleshed cattle being offered.


Demand moderate to good with least action on 800-900 lb. steers and 700-800 lb. heifers. Demand continues very good for lightweight thin fleshed cattle.  Many of these cattle are already headed to grass accounts. Quality was average to attractive.  Weigh-ups showed the complete range of gaunt to full...


Bottom line. Cash fed cattle supplies are ample. Cash demand is lacking. Packers have little incentive to bid up. Those forces will keep near-term pressure on futures, even though longer-term fundamentals are constructive.


Cash hogs. Monday's cash hog prices weren't well established. Some bids were unchanged from Friday. Strength appeared in the western Corn Belt.


Selling interest among producers was limited, due in part to a rebound in futures prices and hopes that demand for hogs may improve later in the week if packers need additional loads for arrival Friday or Saturday to complete this week's slaughter schedules.


Plus most producers appear to be current on shipments, which may pull down average hog weights. Lighter weights are supportive for prices since less pork would be produced per animal and producers may not need to sell as many hogs.


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


* Iowa-Minnesota rose $1.69 to average $84.13.


* Western Corn Belt gained $1.39 to average $83.69.


* Eastern Corn Belt hogs slipped 59 cents to average $79.14.


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


Dow Jones estimated Monday's packer margin at minus $5.54 per head, vs. minus $1.80 on Friday. Thursday's margin was minus $5.34.


USDA estimated Monday's hog slaughter at 431,000, down 1,000 from last week, but up from 369,000 a year ago.


Weakness in loins and picnics trimmed Monday's pork cutout 48 cents to $83.42. Load count totaled a thin 31.


The CME two-day lean hog index, calculated using USDA market data, for Friday was up 17 cents at $84.64.  It's up from $82.67 on Jan. 2...


Bottom line. Cash hogs started the week relatively s oft. However, the recent tendency for cash hogs to rally as cutouts improve suggests demand for pork, and therefore live hogs, remains firm. Pork is enjoying a relative price edge against beef, while poultry prices are advancing. That helps build pork's demand base. Producers being current on marketings leave packer-buyers with limited leverage...





DJ Cash-Hog Prices Mainly Flat; Supplies, Demand in Balance

Curt Thacker - DJ/ - Jan 15, 2013


--Most producers up to date on shipments


--USDA data indicate average hog weight declined modestly last week


--Wholesale-pork prices ease slightly Monday from one-month high hit Friday


Early predictions for the Midwest direct-hog markets Tuesday are mainly steady, or flat, with the previous day's quotes.


Supplies of slaughter-ready animals and demand from processors for them appear generally to be in balance, which could result in a mostly flat market overall for the week. Competition for the hogs that are available is expected to help underpin the market while poor processing margins could limit upside moves for prices, livestock dealers said.


The majority of producers are current, or up to date, on shipments, according to U.S. Department of Agriculture slaughter data. Average carcass weights for hogs last week declined about 0.5 pound from the previous week. The decline in the first full work-week following back-to-back holiday weeks was viewed as supportive for prices since lighter weights mean less pork produced per hog.


Higher feed costs could cause producers to continue to sell the animals earlier than normal and at lighter weights for the near term. Cash prices are currently below producers' break-even costs so they are losing money. Reducing feed usage and weights could trim their losses.


On Monday, wholesale-pork prices fell 48 cents per hundredweight to $83.42.


Earlier projections for Saturday's slaughter are mostly from 90,000 to 95,000 head...





DJ Estimated U.S. Pork Packer Margin Index - Jan 15

DJ/ - Jan 15, 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 14     $ -  5.54             $ - 12.49





DJ U.S. Grain, Soybean Futures Start Open Outcry Trading Higher

DJ/ - Jan 15, 2013


CHICAGO--U.S. grain and soybean futures are trading higher Tuesday, continuing the firm overnight price theme in the open outcry session. Futures are extending Monday's gains as traders exit recent bets on prices declining.


Buying interest is less than on Monday though, as fresh news is harder to find, and markets are starting to run into overhead resistance, says Karl Setzer, analyst with MaxYield Cooperative in West Bend, Iowa.


Soybeans futures are supported by strong demand and worries about the impact of a drier weather pattern setting into Argentina crop growing areas.


Corn futures are trading higher, fueled by improved demand expectations and concerns about the weather for crops in South America. Wheat futures are buoyed by stronger demand expectations and threats to the U.S. winter wheat crop...