DTN Closing Livestock Comments

GENERAL COMMENTS:

The cash cattle trade typically got off to a slow start with buyers exclusively focusing on the collection of new showlists. Ready numbers seem to be generally larger than last week with only Nebraska offering a few less steers and heifers. Neither bids nor asking prices were well defined. According to the closing report, the national hog base is 0.40 higher ($66.00-73.50, weighted average $71.12). Corn futures closed modestly higher, somewhat supported by friendly export inspections. The stock market enjoyed another record session with the Dow closing 142 points higher with the Nasdaq better by 29.

LIVE CATTLE:

Live futures continued to backslide, still ignore the premium status of feedlot sales. Prices settled 47 to 105 lower with deferreds losing ground to nearbys. April closed at its lowest point since December 15. Beef cut-outs: moderately higher, up 0.63 (choice, $188.26) to 0.93 (select, $186.50) with moderate to fairly good demand and moderate offerings (63 loads of choice cuts, 21 loads of select cuts, 10 loads of trimmings, 23 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL:

Steady. Don't look for much cash definition on Tuesday with specific bids and asking prices not likely to develop until at least Wednesday or Thursday.

FEEDER CATTLE:

Feeder futures settled 25 to 220 lower with triple digit losses evident from August on back. Long liquidation and a lack of commercial buying seemed to be the primary forced of bearishness.

On an estimated run of 8,300 head (up from 6,501 last week and 7,859 in 2016), Oklahoma City sold feeder steers and heifers $1-2 higher.

Steer and heifer calves were marked $2-4 higher. CME cash feeder index: 02/10: 128.41, up 0.24.

LEAN HOGS:

While spot Feb closed 20 points higher on the day before its expiration, most lean issues settled 37 to 137 lower. Despite the burgeoning behavior of the cash index, discounted April had little trouble attracted new selling interest. It would appear that some traders are waiting for the other supply shoe to drop, perhaps thinking that market hogs supplies will soon turn more than ample once the fall pig crop (i.e., projected at 5 percent above 2015) starts hitting the scales. Carcass value closed near steady as strength in the loin and belly primals was largely offset by weakness in the butt, rib, ham, and picnic. Pork cut-out: $85.14, up 0.05. CME cash lean index for 02/09: 73.51, up 0.71 (DTN Projected lean index for 02/10: 74.11, up 0.60).

TUESDAY'S CASH HOG CALL:

Steady to $1 higher. Expect cash hog buyers to open with steady/firm bids in the morning as they work to fund another profitable round of slaughter.

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

Follow John Harrington on Twitter @feelofthemarket

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