DTN Closing Livestock Comments

GENERAL COMMENTS:

The cash cattle trade in the North on Thursday exploded sharply higher with most dressed deals marked at $190, as much as $10 higher than last week's weighted average basis Nebraska. On the other hand, business in the South remained at a standstill. Late bids in Kansas and Texas were around $118 ($2-$3 higher than last week sales) but roughly $2 under most asking prices. According to the closing report, the national hog base is $0.08 lower ($45.00-$53.00, weighted average $51.81). Corn futures finished a penny plus higher at the conclusion of a featureless round with light trade. The stock market closed modestly lower with the Dow off 13 points and the Nasdaq down by 6.

LIVE CATTLE

With packer spending blasting into orbit, soon-to-expire spot December has no choice but to rocket higher as well. The lead month surged 272 points higher on the close, settling at its highest point (i.e., $118.70) since May 18. The balance of the field advanced at a much slower pace. Beef cut-outs: significantly higher, up $0.74 (select, $193.89) to $1.63 (choice, $203.47) with moderate demand and light offerings (57 loads of choice cuts, 22 loads of select cuts, 8 loads of trimmings, 16 loads of coarse grinds).

FRIDAY'S CASH CATTLE CALL

Steady/firm with Thursday's full advance. Northern business could be essentially done for the week, but buyers and sellers in the South still have work to do.

FEEDER CATTLE

Feeder issues settled narrowly mixed, mostly up 20 to off 30. Some of the buying energy here is no doubt checked by the discount seen in deferred live issues. CME cash feeder index: 12/28: $133.04, up $0.68.

LEAN HOGS

With the exception of spot Feb, lean contracts closed moderately higher, up 15 to 87. Despite the bearish implications of last week's H&P report, deferred issues have held up reasonably well so far, perhaps reflecting some skeptics in the room regarding government accounting. Carcass value took it on the nose Thursday, falling back more than a buck with all primals losing ground except the butt. Pork cut-out: $81.08, off $1.16. CME cash lean index for 12/27: $57.95, off $0.19 (DTN Projected lean index for 12/28: $57.98, up $0.03).

FRIDAY'S CASH HOG CALL

Steady to $1 lower. Opening bids in the morning are expected to be no better than steady/weak with most plants pretty well supplied going into the New Year break. Saturday's slaughter is expected to be around 305,000 head.

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

(AG)

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