DTN Closing Livestock Comments

GENERAL COMMENTS:

While cattle buying interest was light to moderate here and there, defensive focus made it tough for neither to focus on the hard work of procurement. In the South, as much as $4-$6 separated bids from asking prices (i.e., $116 vs. $122). According to the closing report, the national hog base is $0.91 higher ($55.00-63.50, weighted average $61.24). Corn futures closed a short penny higher, supported by modest yet friendly adjustments to the s&d table (e.g., the carryout was reduced by 48 million bushels). The stock market closed lower with the Dow off 63 points and the Nasdaq down 16.

LIVE CATTLE

Live contracts stumbled further from Tuesday's big climb. In general, prices closed in the red by 62 to 165 points. Nearby contracts led the retreat, uprooted by long liquidation and further discouraging signs of early year beef demand. Spot Feb did manage to attract new buyers/short-covering near session lows, allowing the lean issues to close above support at 117. Beef cut-outs: lower, off $0.29 (choice, $189.10) to $1.40 (select, $185.55) with light-to-moderate demand and moderate offerings (77 loads of choice cuts, 49 loads of select cuts, 8 loads of trimmings, 22 loads of coarse grinds).

FRIDAY'S CASH CATTLE CALL

Steady to $2 lower. The clock is running for this week's cash cattle trade. Look for buyers and sellers to come to terms sometime between late morning and midafternoon, at least enough to generate moderate trade volume.

FEEDER CATTLE

Feeder futures also got hit hard Thursday with triple-digit losses evident through the market. Generally speaking, feeder issues settled 45 to 187 lower, pressured by long liquidation and spillover selling from the live trade. CME cash feeder index: 01/11: $132.60, up $0.29.

LEAN HOGS

Lean contracts settled narrowly mixed, up 35 points to off 20. Though the general trade was slow and relatively featureless, this week's impressive display of cash strength has no doubt helped support the premium status of spot Feb. Carcass value fell hard Thursday, losing more than half of Wednesday's surge as all primals except the belly reversed. Pork cut-out: $79.37, off $1.31. CME cash lean index for 01/10: $60.73, up $1.12 (DTN Projected lean index for 01/11: $71.85, up $1.12).

FRIDAY'S CASH HOG CALL

Steady to $1 higher. Late-week bids in the cash cattle trade are likely to be steady/firm, though most accounts appear to have immediate slaughter needs covered.

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

(AG)

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