DTN Closing Livestock Comments

Closing Comments

Cash cattle markets remain undeveloped Tuesday with bids still unavailable. The overall lack of futures market activity Monday has added to the delay as bids may not surface until sometime Wednesday or Thursday. The few asking prices seen are at $123 to $124 in the South. Active trade is likely to be delayed until sometime Thursday or Friday, with Friday afternoon following the Cattle on Feed report a strong possibility. According to the closing report, the national hog base is $1.24 lower compared with the Prior Day settlement ($68.00-$74.25, weighted average $72.71). The corn trade turned higher in light activity. March futures posted a 1-cent gain Tuesday. The Dow Jones Index is 118 points higher with the Nasdaq up 27 points.

LIVE CATTLE:

Moderate to firm gains held in live cattle trade Tuesday ($0.35 to 1.17 higher) based on firm buyer support through the entire cattle complex. February futures led the market higher based on firmness developing in commercial support and the expectations of strong cash markets. February futures closed at $119.10 per cwt after a $1.17 per cwt rally. The rest of the complex remained tightly grouped with prices from 37 to 55 cents per cwt higher in light-to-moderate trade. The market spread of nearly $10 per cwt between spring and summer contracts continues to limit longer-term market support as summer and fall contracts remain near $100 per cwt. Beef cut-outs: mixed, $0.59 lower (select, $189.81) to down 0.90 (choice, $191.81) with moderate demand and heavy offerings (72 loads of choice cuts, 35 loads of select cuts, 15 loads of trimmings, 20 loads of coarse grinds)

WEDNESDAY'S CASH CATTLE CALL:

Steady to $2 higher. Although cash market activity remains at a standstill Tuesday afternoon, strong buyer support seen in the futures trade may help to spark firm buyer support through the end of the week. Bids still remain undeveloped and may not be seen until late Wednesday or Thursday. But feeders remain aggressive and are likely not to settle for lower money earlier than Friday.

FEEDER CATTLE:

Firm gains developed through the entire feeder cattle market ($0.47 to $1.10 higher) as expectations of follow-through support continue to develop. The ability to establish support levels near $122 per cwt through last week has created additional commercial buyer support moving back into the market. The upcoming Cattle on Feed report may bring additional volatility to the market given the expected placement increases likely through the month of January. CME cash feeder index: 2/20: $127.18, down $0.11.

LEAN HOGS:

Trade remained sluggish Tuesday as traders slowly backed away from gains that developed late last week. The complex closed mixed to mostly lower in a moderate range ($0.42 lower to $0.5 Higher) as traders steadily backed away from early morning support. The ability to bring active gains back into the market Tuesday morning following the long weekend was met with lackluster interest and the inability for buyers to follow through. April futures led the market lower with a 42-cent-per-cwt loss, as contracts remain under narrow pressure given longer-term market direction. Carcass values are lower. Sharp losses in bellies offset narrowly mixed price moves in most other primal markets. Pork cut-out: $84.54 down $0.92. CME cash lean index for 2/17: $77.07, down $0.59. DTN Projected lean index for 2/20: $77.24, up $0.17).

WEDNESDAY'S CASH HOG CALL:

Mixed. Packers are expected to start out midweek similar to early week trade with prices mixed on either side of steady money. The trading range is likely to be listed 50 cents lower to 50 cents higher, although most bids are expected to remain steady to start out the day. Active procurement levels are likely with a 443,000 run expected Wednesday while 105,000 head are likely to develop Saturday.

Rick Kment can be reached at rick.kment@dtn.com

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