DTN Midday Livestock Comments

GENERAL COMMENTS:

Light cattle trade is reported in parts of Kansas at $122, steady with last week. Otherwise, packer inquiry is light to moderate in the face of higher asking prices (e.g., $125 in the South, $198-200 in the North). According to the midday report, the national hog base is $1.59 lower compared with the Prior Day settlement ($59.00-65.00, weighted average $62.00). Corn futures are generally 4 cents lower in late morning business, pressured by favorable South American weather and some strength in the dollar. The Dow is 28 points higher with the Nasdaq off 3.

LIVE CATTLE:

Live cattle issues have been struggling through the morning, and appear to be softening even more as we move into the final hour. Despite how cash sales on the internet yesterday and some stability noted in Kansas today (i.e., $122), some board traders apparently feel the need to lead the country lower. Beef cut-outs are sharply higher at midday, up $1.15 (select, $190.31) to $1.36 (choice, $192.61) with light to moderate box movement (32 loads of choice cuts, 16 loads of select cuts, 13 loads of trimmings, 12 loads of coarse grinds).

FEEDER CATTLE:

Feeder futures are also on the defensive at midday, taking defensive hints from the live contracts. Given the pending expiration of spot Jan and the premium of the cash index, you might expect the board to soon find the brakes. Nevertheless, most deferred issues are devolving into triple-digit losses.

LEAN HOGS:

Lean contracts have drifted moderately lower through most of the morning, but selling interest may be mounting as we move into the tail end of the session. Cash sales are quoted lower by midday reports, and such news could be working to undo yesterday's board progress to some extent. There also seems to be some spillover selling flowing from the cattle complex. The pork carcass continues to appreciate at midday, especially supported by a $7.38 jump in the belly primal. Pork cut-out: $82.53, up $1.09. CME cash lean index for 01/24: 67.73, up .53 (DTN Projected lean index for 01/25: 68.11, up 0.35).

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

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