DTN Closing Livestock Comments

GENERAL COMMENTS:

Feedlot country was very quiet as packers focused exclusively on the distribution on new showlists. Ready numbers appear to be generally smaller than last week, especially in Texas. According to the closing report, the national hog base is $0.25 lower ($59.00-$66.00, weighted average $63.99). The corn market slumped 4 cents-plus lower, pressured by reports of minimal damage to South American harvest potential and spillover bearishness from the beans. The Dow closed 122 points lower with the Nasdaq off by 47.

LIVE CATTLE

Live futures gapped sharply lower on the opening and never looked back. Aggressive selling pressure was primary linked to December's larger-than-expected placement activity. Bears seemed to growl through the defensive session that this was just the beginning of expanding feedlot populations. Most contracts settled 127 to 250 points lower with nearby issues closing right at 40-day moving averages. Beef cut-outs: mostly higher, up $0.65 (choice, $189.74) to off $0.01 (select, $188.93) with light to moderate demand and offerings (38 loads of choice cuts, 16 loads of select cuts, six loads of trimmings, 19 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL

Steady. Look for the cash arena to remain untested with both bids and asking prices poorly defined. Significant trade volume could easily be postponed until Thursday or Friday.

FEEDER CATTLE

Following live counterparts from the bearish get-go, feeders also gapped sharply lower with nearbys plunging below 40-day moving averages in one fell swoop. Losses ranged from 212 to 355 points. On an estimated run of 11,000 head (down from 12,246 last week but greater than 9,128 counted in 2016), Oklahoma City sold feeder steers and heifer $4-$7 lower. At the same times, steer and heifer calves were marked $5-$8 lower. CME cash feeder index: 01/27: $131.20, off $0.51.

LEAN HOGS

Although lean hog futures traded in a very narrow range through the session (i.e., closing 20 higher to 10 lower), their stand-still performance looked extremely impressive compared with the imploding action in the cattle complex. The front of the board was once again supported by the premium status of the cash index and decent wholesale product stability. Carcass value closed moderately higher, supported by decent demand for loin, rib, and belly cuts. Pork cut-out: $82.81, up $0.41. CME cash lean index for 01/26: $68.30, up $0.19 (DTN Projected lean index for 01/27: $68.44, up $0.14).

TUEDAY'S CASH HOG CALL

Steady. Expect hog buyers to resume procurement chores with near-steady bids in the morning.

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

(AG)

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