DTN Closing Livestock Comments

GENERAL COMMENTS: From Friday to Friday livestock futures posted the following changes: Feb LC, up $3.05; April LC, up $2.37, Jan FC, up $1.22; Mar FC, up $2.08; Feb LH, up $0.70; Apr LH, up $0.60. Firm early gains in cattle futures eroded through the end of the session with increased trade volume, leaving markets unsettled. Hog futures posted strong losses Friday, but remain firmly higher for the week. Corn futures are higher in light activity. March futures were 2 cents higher. Dow Jones Index is 57 points lower with Nasdaq down 20 points.

CASH MARKETS: Cash cattle trade has started to develop with light to moderate trade seen in most areas. Live cattle trade in the South is seen at $122 per cwt, which is generally $1 per cwt higher. Dressed trade in the North is seen at $197, $2 per cwt higher from last week. Asking prices on cattle still on show lists late Friday afternoon remain firm at $125 to $126 live and $200 and higher dressed. According to the closing report, the national hog base is $0.20 lower with a weighted average of $50.88 per cwt. Full range of $47.00 to $53.00 per cwt.

LIVE CATTLE: Traders pulled back from contract highs seen Friday as prices hovered in a narrow to moderate range at the closing bell ($0.17 lower to $0.45 higher). Limited support was seen late in the day Friday with prices pulling back from contract highs seen earlier in the day in front month February futures. Markets closed mostly higher with nearby prices seen 10 to 40 cents per cwt in most contracts as traders focus on building market support through the end of the month. Beef cut-outs: $1.50 lower (select, $206.27) and down $1.50 (choice, $212.46) with moderate demand and offerings, 107 loads (77 loads of choice cuts, 23 loads of select cuts, nine loads of trimmings, 16 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL: Steady. Cash activity Monday is expected to be at a standstill with show list distribution and inventory taking the extent of activity.

FEEDER CATTLE: Mixed prices developed as buyers eroded in late day trade (0.62 lower to $0.12 higher). Firm gains in live cattle futures through most of the session helped bring additional buyers back to the complex. This created additional uncertainty through the entire cattle market as early gains slowly eroded in the last hour of trade. January futures fell 62 cents per cwt, with limited interest seen through the market. The majority of selling pressure was seen in nearby contracts as spot month January contracts leading the complex lower with a 62-cent loss. CME cash feeder index for 1/10 is $145.46 down $0.09.

LEAN HOGS: Firm pressure swept through nearby contracts, as traders backed away from weekly gains ($0.35 to $1.50 lower). Sharp losses moved through lean hog markets with increased trade seen in nearby contracts as most contracts through the summer months posted triple-digit losses. February futures posted a $1.42 per cwt loss, creating additional concern that pressure may develop early next week. The recent market support seen over the last few days is still creating a firming tone, with prices still closing nearly $1 per higher for the week even with triple-digit losses on Friday. Pork continues to shift higher despite mixed price levels in primal cuts. Pork cutout values gained $0.50 per cwt, moving to $70.96 per cwt. CME cash lean index for 1/09 $55.99 up $0.89. DTN Projected lean index for 1/10 $56.69 up $0.70.

MONDAY'S CASH HOG CALL: Steady to $1.00 higher. Late week pressure seen in live cattle futures and the inability to carry strong cash market support through the end of the week will limit cash bids early Monday. Most bids are expected to remain steady early next week. Monday plant runs are expected at 468,000 head.

Rick Kment can be reached at rick.kment@dtn.com

(AG)

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