DTN Closing Livestock Comments

GENERAL COMMENTS:

Activity in feedlot country was limited to the distribution of new showlists. Generally speaking, the new offering looks larger than last week, especially in the South. According to the closing report, the national hog base is $0.68 higher ($45.00-$54.00, weighted average $52.65). Corn futures closed nearly 4 cents in the green with spot March notching a new two-week high. Most of the credit seems tied to commercial buying interest. The Dow closed 119 points higher with the Nasdaq positive by 45.

LIVE CATTLE

At the conclusion of a very choppy trading session, live contracts settled generally 17 to 117 lower with nearbys losing ground to deferreds. Although the board was supported early by the premium status of recent feedlot sales, traders apparently weren't impressed enough to sustain buying interest. Selling was partially encouraged by new strength in the dollar and fears of faltering foreign demand for U.S. beef. Beef cut-outs: unchanged to higher, steady (choice, $203.33) to up $0.73 (select, $192.84) with light-to-moderate demand and offerings (31 loads of choice cuts, 17 loads of select cuts, 7 loads of trimmings, 13 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL

Steady to $2 higher. While we could see a few preliminary bids at midweek, significant trading interest is unlikely to gel until sometime Thursday or Friday.

FEEDER CATTLE

Feeder issues settled on a mixed basis, up 30 to off 32 points. The discounts of deferred live contracts made it difficult to recruit new buying interest here. CME cash feeder index: 01/02: $133.15, up $0.72.

LEAN HOGS

Lean hog futures quickly surrendered gains scored in light volume right before the holiday break. The sizable discount of the cash index was an obvious drag. The stronger dollar also proved to be a worry for export bulls here as well as the live cattle trade. The carcass value closed sharply lower to kick off 2017, pressured by softer demand for loin, picnic and ham cuts. Pork cut-out: $81.08, off $1.16. CME cash lean index for 12/30: $57.47, off $0.29 (DTN Projected lean index for 01/02: NA).

WENESDAY'S CASH HOG CALL

Steady/firm. Expect generally firm bids at midweek as packers work to fund aggressive Saturday kill plans near 360,000 head.

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

(AG)

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