DTN Closing Livestock Comments

GENERAL COMMENTS:

Cattle buyers could no longer hide real hunger for ready cattle Thursday. Significantly higher bids surfaced in the early going, and by midafternoon, trade volume totals were quite large around the feeding circuit. Live biz in the South was marked at $122-$123, $3-$4 higher than last Friday. At the same time, dressed deals in the North ranged from $194-$195, mostly $5 higher than last week. According to the closing report, the national hog base is $0.54 lower ($58.00-$64.75, weighted average $62.88). Corn futures closed a penny-plus higher, helped by news of reduced Argentine prospects and record ethanol production. The Dow closed 72 points lower with the Nasdaq off 15.

LIVE CATTLE

Racing to keep pace with the explosive cash trade, live contracts rolled 30 to 75 higher on the close. Spot February settled as high as $121.02, the fanciest landing for a lead contract since June 10. Besides the hot-shot motivating of aggressive packer spending, board progress was underwritten by technical buying and short-covering. Beef cut-outs: significantly lower, off $0.57 (select, $187.49) to $1.62 (choice, $191.60) with light demand and light to offerings (68 loads of choice cuts, 14 loads of select cuts, four loads of trimmings, 30 loads of coarse grinds).

FRIDAY'S CASH CATTLE CALL

Steady/firm with Thursday's advance. While scattered clean-up deals are possible on Friday, we believe the cash trade is essentially done for the week thanks to Thursday's significant trade volume in most areas.

FEEDER CATTLE

Feeder issues were swept higher by the bullish draft of live futures and the general well of psychology. Prices settled 25 to 95 higher with nearbys gaining on deferreds. CME cash feeder index: 01/18: $132.25, off $0.12.

LEAN HOGS

While lean futures settled 15 to 97 higher, the front on the board remained stuck in a fairly narrow trading range. Indeed, the stickiness of lean issues seems more than a little strange given the steady appreciation of the cash index and the bullish vibes rumbling from the cattle market. The carcass value held about steady today as stronger demand for fresh cuts offset weakness in the ham primal. Pork cut-out: $78.90, up $0.06. CME cash lean index for 01/17: $66.01, up $1.17 (DTN Projected lean index for 01/18: $66.69, up $0.68).

FRIDAY'S CASH HOG CALL

Steady to $1 higher. Look for late-week hog buyers to wrap up the week's procurement with steady/firm bids.

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

(AG)

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