DTN Closing Livestock Comments

Cattle Futures Close Bullish Week With Mixed Results

(DTN file photo)

GENERAL COMMENTS:

The cash cattle market Friday was very slow thanks to aggressive business on Thursday. Thanks to sharply higher packer spending, most showlists were pretty much cleaning up before Friday began. It's a good bet that feedlot managers will be eager to price cattle sharply higher early next week. The National hog base closed $0.07 lower compared with the Prior Day settlement ($58.00-$62.88, weighted average $62.88). From Friday to Friday, livestock futures scored the following changes: Feb LC Up $1.73; Apr LC up $1.05; Jan FC Up $2.65; Mar FC Up $1.97; Feb LH Off $0.30; Apr LH Off $1.15. Corn futures closed mostly $0.03 cents higher, supported by lower estimates of South American production and a softer dollar. The stock market closed mostly higher with the Dow off 94 and the NASDAQ better by 15.

LIVE CATTLE

Futures closed mixed, off 90 to up 45. Generally speaking, Friday's trade was tied to late-week profit-taking and pre-weekend positioning. Nearby contracts lost ground to deferreds, suggesting bull-spreaders taking profits. Positively, spot February closed the week above 120, an important psychological achievement. Having said that, long-term resistance now sits above the market at 122-123. Beef cut-outs: lower (Choice, $190.42 off $1.18, Select $186.64 off $0.85) on light to moderate demand and light offerings (46 loads of choice cuts, 19 loads of select cuts, 07 loads of trimmings, 17 loads of coarse grinds).

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MONDAY'S CASH CATTLE CALL

Steady to $2.00 higher. Monday will be typically slow, limited to the distribution of new showlists. We expect ready numbers to be steady to somewhat smaller. Our guess is that feedlot managers will start out pricing showlists around $125.00 or better on a live basis.

FEEDER CATTLE

Futures closed mostly higher, up 115 to off 10. Most of Friday's buying interest focused on nearby issues. Spot January was supported by the firm behavior of the cash market. For the first time in months, the spot month has closed at a near par with the cash index. CME cash feeder index: 01/19: $133.28, up $1.03.

LEAN HOGS

Futures closed mixed, off 82 to up 90. Despite an advancing cash index, nearby contracts seemed rather cautious through the week. Note that spot February closed Friday at $65.30, roughly $1.70 under the cash index. Some traders seem worried that the substantial cash rally seen since late November is about to run out of gas. Time will tell. Pork cut-out: $79.71 (FOB Plant) up $0.81. CME cash lean 01/18: $66.69, up $0.68 (DTN Projected lean index for 01/19: $67.01, up $0.32).

MONDAY'S CASH HOG CALL

Steady. Hog buyers are expected to resume procurement chores on Monday with generally steady bids.

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

(AG)

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