DTN Closing Livestock Comments

GENERAL COMMENTS

Generally light-to-moderate trade volume developed in most parts of cattle feeding country. Most live sales in the South were marked at $121, roughly $4 lower than last week. Dressed deals in the North averaged close to $190, nearly $11 below last week's weighted average basis Nebraska. According to the closing report, the national hog base is $0.96 lower ($45-$50.50, weighted average $49.15). Corn futures closed fractionally lower as traders positioned ahead of stocks and planting intention numbers due out late Thursday morning. The stock market closed lower with the Dow off 9 points and the Nasdaq down 59.

LIVE CATTLE

Live contracts covered quite a range Wednesday, spending time in both red and green ink. At the end of the session, the board closed moderately higher, up 32 to 82 thanks to short-covering and the technical adjustments of oversold charts. Yet most issues finished well below session highs, perhaps reined in by news of lower cash sales. Beef cut-outs: significantly lower, off $0.78 (choice: $221.62) to $2.61 (select: $211.63) with light-to-moderate demand and moderate offerings (81 loads of choice cuts, 38 loads of select cuts, 9 loads of trimmings, 15 loads of ground beef).

THURSDAY'S CASH CATTLE CALL:

Steady/weak with the midweek decline. Buyers and sellers are likely to complete country marketing chores Thursday. Barring a sudden surge in futures, pre-holiday sales will probably be no better than steady with Wednesday.

FEEDER CATTLE:

Feeders closed sharply higher with all but spot March landing triple-digit gains (i.e., up 122 to 247). Expiring March is obviously tied close to the cash index. CME cash feeder index for 03/27: $136.23, up $0.01.

LEAN HOGS:

Pressured by the non-stop erosion of the cash index, spot April slumped another 82 points lower. Yet the rest of the market settled 35 to 260 higher with summer issues putting on quite a bullish show. Indeed, June through August opened lower but then staged impressive bullish reversals. While it's too early to claim any technical victory, summer charts could have just put in spike bottoms that will lead prices higher over the next quarter or so. On the other hand, the reversing action could be simply tied to positioning before the March 1 inventory due out tomorrow. Carcass value closed moderately higher as higher bellies overshadowed rib and loin weakness. Pork cut-out: $70.20, up $0.48. CME cash lean index for 03/22: $60.58, off $0.77 (DTN Projected lean index for 03/27: $59.85, off $0.73).

THURSDAY'S CASH HOG CALL:

Steady to $1 lower. Look for late-week bids to remain on the defensive thanks to ample offerings.

John A. Harrington can be reached at john.harrington@dtn.com

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