DTN Closing Livestock Comments

GENERAL COMMENTS: Light-to-moderate trade volume developed Friday afternoon in cattle country. Live sales in the South are mostly marked at $119, roughly $1 higher than last week. Some dressed steers and heifers are tagged at $188, also a buck higher than last week's weighted average basis Nebraska. According to the closing report, the national hog base is $0.29 higher compared with the Prior Day settlement ($42-$47.21, weighted average $46.71). March corn traded higher most the day, but ended just fractionally in the green. While nearby corn dug in fairly well since Monday, most of this week's market focus was on the return of China to the U.S. soybean market (and with soy fireworks kept to a minimum). From Friday to Friday, livestock futures scored the following changes: Dec LC, up $1.67; Feb LC, up $0.88; Jan FC, up $3.20; Mar FC, up $3.90; Dec LH, up $0.70; Feb LH, off $3.37. The stock market crashed sharply lower with the Dow failing by 496 points (sinking to its lowest close since May - 24,100). The Nasdaq retreated by as much as 159 points.

LIVE CATTLE: The lion's share of closing prices were moderately lower (i.e., off 17 to 45 cents) with only spot December (presumably supported by cash premiums) closing marginally higher. Although a few scattered country sales on the firm side of last's week's cash were evident here and there around noon, the board really didn't have much to go on when the time came to close the CME shop. Perhaps some late cash evidence greater than the price ranges noted above could reignite buying interest on Monday. But, right now, that seems doubtful. Beef cut-outs closed mixed with the choice off $1.51 ($210.96) and select up $2.14 ($203.14). Box demand was called light to moderate with light offerings.

MONDAY'S CASH CATTLE CALL: Steady to $1 higher. Needless to say, the week will slowly commence with the typical collection of new showlists. Fed offerings are likely to be about steady with the round just worked. Having said that, packer appetites could be smaller as they consider the tighter schedule around Christmas ahead.

FEEDER CATTLE: The closing round here was a bit of a yawner as longs carefully took profits at the tail-end of a fairly dynamic week. Final settlements ranged from 12 to 40 cents lower. So far, both feedlot close-outs and 2019 hedging opportunities seem to lend good support in this arena. CME cash feeder Index for 12/13: $146.90, up $0.50.

LEAN HOGS. Lean hog futures called it a week with a final round of mixed prices, up 20 cents to down 37 cents. Spot December expired at $54.95, up 15 cents. The potential of new spot February next week will quickly move to the center of the market spotlight. Carcass value hit the matt right before the weekend bell, cut deep by softening demand for picnics and processing items. The cut-out totaled $71.80, off $1.37. (DTN Projected lean index for CME cash lean index for 12/13: $55.17, off $0.19) CME cash lean index for 12/12: $55.36, off $0.18.

MONDAY'S CASH HOG CALL: Steady to $1 lower. Look for hog buyers to start work on the defensive Monday, reacting both to record slaughter (i.e., 2.12 million head) and challenged carcass value.

John Harrington can be reached at feelofthemarket@yahoo.com

Follow John Harrington on Twitter @feelofthemarket

(CZ)

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