DTN Closing Livestock Comments

GENERAL COMMENTS:

The cash cattle market was not tested in the late rounds with buyers and sellers apparently satisfied with the business generated on Thursday. Trade volume totals for the week look no better than moderate. The national hog base closed up $0.62 compared with the Prior Day settlement ($59.00-$66.00, weighted average $63.98). From Friday to Friday, livestock futures scored the following changes: Feb LC Off $1.93; Apr LC Off $1.65; Mar FC Off $3.82; May FC Off $3.38; Feb LH Up $1.60; Apr LH Off $0.17. Corn futures closed a penny-plus lower in light trade volume. Lackluster activity this week seemed to be linked to positive growing conditions in South America and a firm undertone to the dollar. The stock market closed mixed with the Dow off 7 and the NASDAQ up 5.

LIVE CATTLE

Futures closed moderately lower off 22-52. Once again, traders chose to ignore the premium status of feedlot business. Indeed, spot February will start out on Monday $3.00-$4.00 under the most recent cash sales. The Jan. 1 on-feed report turned out to be bearish, especially in terms of the large December placement total: Jan. 1 on feed 100%; placed in December up 18%; marketed in December up 7%. Beef cut-outs: weak to lower (Choice, $192.70 off $0.30, Select $188.94 off $0.80) on light-to-moderate demand and light offerings (41 loads of choice cuts, 12 loads of select cuts, 04 loads of trimmings, 30 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL

Steady. Monday's activity will be limited to the collection of new showlists. We look for the offering to be about steady with showlists priced around $124.00 in the South, and $195.00 in the North.

FEEDER CATTLE

Futures closed mixed, up 47 to off 82. Spot March was somewhat supported by the premium of the cash index. Yet the nearby remains more than $5.00 under the cash equivalent. CME cash feeder index: 01/26: $131.71, up $0.91.

LEAN HOGS

Futures closed sharply higher up 5-120. Lean contracts have put in a very volatile week, swinging one way or the other by triple digits. The late-week action proved to be to the upside, supported by short-covering and cash premiums. Nevertheless, futures remain locked in a lateral trading range, still waiting for something to breakout or breakdown. Pork cut-out: $82.91 (FOB Plant) up $0.10. CME cash lean 01/25: $68.11, up $0.35 (DTN Projected lean index for 01/26: $68.30, up $0.19).

MONDAY'S CASH HOG CALL

Steady to $1.00 higher. Hog buyers are expected to resume work on Monday with generally firm bids.

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

(AG)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.