DTN Closing Livestock Comments

GENERAL COMMENTS:

Besides gathering new showlists, cattle buyers did have much to say in the early rounds. The new offering is generally smaller with only Kansas showing more ready steers and heifers. According to the closing report, the national hog base is $0.04 lower ($53.00-$58.00, weighted average $55.23). The corn market closed several cents higher with the help of decent export inspections. The Dow closed 76 points lower with the Nasdaq notching another record high (up 10).

LIVE CATTLE

For most of the session, live cattle churned like they were going no place fast. Then, late in the day, aggressive short-covering surfaced to push most months sharply higher. At the close, live issues settled 27 to 177 higher with nearbys racing ahead of deferreds. Some wanted to credit bullish news of strong beef exports in November (i.e., 155,335 MT, up 20% from 2015). The question remains if the spot basis can weaken further, requiring bullish traders to take out resistance near 117. Beef cut-outs: sharply lower, off $1.28 (select, $191.94) to $1.46 (choice, $197.35) with light-to-moderate demand and moderate offerings (72 loads of choice cuts, 29 loads of select cuts, 3 loads of trimmings, 36 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL

Steady. Bids and asking prices are likely to remain poorly defined Tuesday with significant trade volume possibly delayed until Thursday or Friday.

FEEDER CATTLE

Following the late lead of the live market, feeder futures powered 57 to 170 higher. On an estimated run of 11,000 head (up from 7,527 in 2016), Oklahoma City sold feeder steers and heifers $5-$8 lower than the last good market test of Dec. 19. CME cash feeder index: 01/06: $133.11, off $0.20.

LEAN HOGS

With the exception of a 22-point loss by spot Feb, lean issues closed solidly higher, up 17 to 92. Though the joy was more contained here, November also proved to be a bullish month for shipping U.S. pork. Indeed, total pork exports for the month set a new record at 225,757 MT, up 24% from last year. Carcass value rebounded to start the week, hike by better demand for all major primals except the ham. Pork cut-out: $79.86, up $0.85. CME cash lean index for 01/05: $057.69, up $0.08 (DTN Projected lean index for 01/06: $58.85, up $1.16).

TUESDAY'S CASH HOG CALL

Steady to $1 higher. Look for hog buyers to resume work in the morning with steady/firm bids based upon light country movement on Monday and firming carcass value.

For more from John, see http://www.feelofthemarket.com/…

(AG)

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