DTN Closing Livestock Comments

GENERAL COMMENTS:

The cash cattle trade remained untested Tuesday with both buyers and sellers too dismayed by slumping futures to say much. Some showlists were prices around $120-$122 on a live basis and $192-$194 dressed. Significant trade volume could be delayed until Thursday or Friday. According to the closing report, the national hog base is $1.63 higher ($60.00-$67.50, weighted average $65.58). Corn futures settled about 2 cents higher with no particular feature evident. The stock market closed mostly lower with the Dow off 107 points and the Nasdaq up 1.

LIVE CATTLE

For the opening hour or so, live cattle futures showed some interest in stabilizing. Yet from midmorning on, selling interest remained fairly consistent with specs indifferent to cash premiums. When everything was said and done, contracts settled 22 to 65 points with Feb closing at its lowest point since Jan. 6 and below the 40-day moving average for the first time early November. The annual herd inventory proved to be generally well anticipated with all cattle, all cows, and the 2016 calf confirmed to be up 2%, up 3%, and up 3%, respectively. Beef cut-outs: mixed, steady (select, $188.93) to off $0.48 (choice, $192.87) with light-to-moderate demand and light offerings (55 loads of choice cuts, 18 loads of select cuts, 12 loads of trimmings, 29 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL

Steady to $2 lower. Preliminary bids could begin to surface at midweek, though both buying and selling interest could hinge upon the board's ability (or not) to stabilize.

FEEDER CATTLE

With the exception of a few far-deferred contracts, feeder futures faltered by another 40 to 112 points. Besides the defensive tone in the live market, bearish expectations tied to the annual cattle inventory may it extra hard to recruit new buyers. Spot March landed its lowest settlement since Dec. 9. CME cash feeder index: 01/30: $130.29, off $0.91.

LEAN HOGS

After spending months eating the dust of the cash index, spot Feb finally took hold today and broke toward blue sky. For the first time since last June, Feb closed over 69 and seemed determined to lead winter cash higher. Generally speaking, lean issues closed in the green by 12 to 197 points. The carcass value continued to appreciate today with progress largely tied to red-hot bacon demand. The belly primal surged by another $7.43. Pork cut-out: $82.81, up $0.41. CME cash lean index for 01/24: $67.73, up $0.53 (DTN Projected lean index for 01/30: $65.89, up $1.45).

WEDNESDAY'S CASH HOG CALL

Steady to $1 higher. Cash bids at midweek should begin on a firm basis thanks to both tightening supplies and improving pork demand.

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

(AG)

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