DTN Closing Livestock Comments

Closing Comments

Cash business in feedlot country remains at a standstill with a few bids and asking prices separated by as much as $6 on a live basis (e.g., $116 versus $122, basis the South. The FCE auction on the interest seemed spot will only about 25 percent of the offering market as sold. The weighted average totaled $119.04, up $1.41 from last week. Yet this average seemed skewed by both the light volume and wide price range. According to the closing report, the national hog base 0.30 higher ($67.00-75.00, weighted average $73.12). The corn market jumped generally 3-4 cents higher with spot March hitting a new seven-month high. Solid export demand seemed to trump worries over large South American crops. The stock market posted a record close for the fifth consecutive session. The Dow settled 107 points higher with the Nasdaq up 36.

LIVE CATTLE:

Nearby live contracts quickly surrender nearly half of yesterday's rally. While a few contracts in the far deferred settle some higher, February through August lost 2 to 65 points. Indeed, the board's inability to build on Tuesday's rebound only underscored its technical significant (i.e., no more than a dead cat bounce). Beef cut-outs: modestly lower, off 0.02 (choice, $188.34) to 0.10 (select, $187.15) with light to moderate demand and offerings (93 loads of choice cuts, 28 loads of select cuts, 6 loads of trimmings, 36 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

Steady/firm. Buying interest could start to improve Thursday, but significant trade volume seems more likely to be delayed until Friday.

FEEDER CATTLE:

Feeders settle moderately higher i.e., up 15 to 45), supported by follow-through buying, short covering, and the cash index premium. CME cash feeder index: 02/14: 128.43, off 0.03.

LEAN HOGS:

Despite its substantial discount to the cash index, the debut of new spot April was less than spectacular. Indeed, April seemed to attract the most selling interest, closing 52 lower with the rest of the trade retreated by 10 to 42 points. Carcass value held about steady as significant belly strength largely offset by weakness in hams, picnics, and butts. Pork cut-out: $85.48, up 0.10. CME cash lean index for 02/13: 74.62, up 0.51 (DTN Projected lean index for 02/14: 75.31, up 0.69).

THURSDAY'S CASH HOG CALL:

Steady to $1 higher. Look for cash hog buyers to resume procurement chores in the morning with steady/firm bids.

John Harrington can be reached at harringtonsfotm@gmail.com

Follow John Harrington on Twitter @feelofthemarket

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