DTN Closing Livestock Comments

GENERAL COMMENTS:

The cash cattle trade remained untested at midweek with both bids and asking prices poorly defined. Some showlists are priced around $122 in the South and $195 in the North. Positively, the FCE did report higher internet sales (i.e., roughly 3,500 steers and heifers averaged $120.52, $1.36 higher than last week). According to the closing report, the national hog base is $0.01 lower ($58.00-$64.24, weighted average $62.37). The corn trade settled fractionally lower is largely listless action. The stock market closed with mixed results, off 22 points on the Dow and up 16 on the Nasdaq.

LIVE CATTLE

Further bull-spreading and signs of cash optimism caused live contracts to once again score solid gains. With nearbys outperforming deferreds, prices settled 5 to 70 higher. Though the technical profile didn't change much with Wednesday's advance, it seems fair to say that bullish psychology received a shot in the arm thanks to the impressive close over 120 basis February. Beef cut-outs: significantly higher, up $0.83 (select, $188.06) to $1.60 (choice, $193.22) with light-to-moderate demand and offerings (76 loads of choice cuts, 22 loads of select cuts, 5 loads of trimmings, 30 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL

Steady to $2 higher. Look for more bids to be thrown on the table in the morning, yet significant trade volume could easily be delayed until sometime Friday.

FEEDER CATTLE

Spot January closed modestly higher (i.e., up 7), supported by the premium of the cash index. Yet the balance of the complex finished 7 to 52 points lower, checked by long liquidation and a general lack of buying interest. CME cash feeder index: 01/17: $132.37, off $0.19.

LEAN HOGS

Lean futures were pressured through the session, closing generally 42 to 112 points lower. Generally speaking, second-quarter issues lost ground to be spot February and the far deferreds. Wednesday's retreat seemed to be tied to profit-taking, strength in the dollar, and signs of cooling fundamentals. The pork carcass value stumbled Wednesday tied to the erosion of all primals except the belly and rib. Pork cut-out: $78.84, off $1.69. CME cash lean index for 01/16: $64.84, up $0.74 (DTN Projected lean index for 01/17: $66.01, up $1.17).

THURSDAY'S CASH HOG CALL

Steady. The cash hog market should open generally steady with buyers still needing inventory but somewhat more cautious about product demand.

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

(AG)

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