DTN Closing Livestock Comments

GENERAL COMMENTS:

The cash cattle arena remained absolutely empty with not even token bids or asking prices cluttering the way. Both buyers and sellers were apparently content to await more definite signals of cash potential from the board and/or the wholesale product trade.

According to the closing report, the national hog base is $1.70 higher ($66.00 to 74.50, weighted average $72.78). The corn trade settled fractionally mixed at the conclusion of a largely quiet and featureless session. The stock market extended its bullish roll with yet another set of record closes. The Dow settled 92 points higher with the Nasdaq up 18.

LIVE CATTLE:

Live contracts settled generally 32 to 147 higher with nearby powering ahead of deferred. Spot Feb managed to nose back above the 40-day moving average. Yet, the challenge for board bulls is to close above the top of the bearish chart gap created in late January (i.e., 118.32). Beef cut-outs were moderately higher, up .10 cents (choice, $188.36) to .67 cents (select, $187.25) with light-to-moderate demand and moderate offerings (69 loads of choice cuts, 27 loads of select cuts, 5 loads of trimmings, 23 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL:

Steady/firm. Cattle country could start to take preliminary definition at midweek. Our guess is that asking prices will be around $122 plus in the South and $192 plus in the North. Yet, meaningful trade volume will probably be delayed until Thursday or Friday.

FEEDER CATTLE:

Feeder issues rebound by triple digits, closing mostly 132 to 217 higher. Today's rally seemed funded by short covering, profit taking, and ideas of oversold charts. CME cash feeder index: 02/13: 128.46, up .05.

LEAN HOGS

Yesterday, retreating the April lean contract acted as if it wanted nothing to do with the bullish tone of expiring February.

But such indifference quickly vanished today as the nearby board rushed higher to minimize its discount with both spot February and the cash index. Spot Feb. expired at 75.17, 42 points higher. April through August surged 100 to 160 higher, spurred by bull spreading and new spec buying. Carcass value closed modestly higher, with strength in fresh cuts, ribs, and hams overshadowing weakness in picnics and bellies. Pork cut-out: $85.38, up .24. CME cash lean index for 02/10: 74.11, up .60 (DTN Projected lean index for 02/13: 74.62, up .51).

WEDNESDAY'S CASH HOG CALL:

Steady to $1 higher. Expect hog buyers at midday to maintain their bullish posture, opening with bids at least steady to $1 higher.

John Harrington can be reached at harringtonsfotm@gmail.com

Follow John Harrington on Twitter @feelofthemarket

(ES)

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