DTN Closing Livestock Comments

Triple-Digit Losses Dominate Closing Cattle Futures

(DTN file photo)

Closing Comments

The cash cattle trade was very quiet just before the weekend with buyers and sellers content with the aggressive round of business seen at midweek. Again, most live sales in the country were generally $5.00 higher (i.e. $125.00/$196.00). The National hog base closed off $2.17 compared with the Prior Day settlement ($63.00-$70.00, weighted average $68.56). From Friday to Friday, livestock futures scored the following changes: Feb LC up $5.83; Apr LC up $0.03; Mar FC off $2.37; May FC off $2.20; Apr LH off $2.75; May LH off $1.73. Corn futures closed 1 to 2 cents lower, checked by late-week profit-taking and prospects for a large South American harvest. The stock market closed higher with the Dow up 11 and the NASDAQ better by 9.

LIVE CATTLE:

Futures closed sharply lower with the lone exception of spot February, which was up 67. While February was supported through the week by greater packer spending in the country, deferred discounts seemed to get deeper and deeper. Part of Friday's selling may have been tied to bearish anticipation of the Feb. 1 USDA Cattle on Feed report. Having said that, the actual report released Friday afternoon really contained no surprises: on feed up 1%; January placement up 11%; January marketing up 10%. Beef cut-outs: sharply higher (Choice, $198.96, up $2.77; Select $195.48, up $2.65) on moderate to fairly good demand and moderate offerings (55 loads of choice cuts, 17 loads of select cuts, 05 loads of trimmings, 15 loads of coarse grinds).

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

MONDAY'S CASH CATTLE CALL:

Steady to $2.00 higher. Monday's activity will be limited to the distribution of new showlists. Given this week's great cash success, feedlot managers will no doubt be pricing ready cattle significantly higher (e.g. $128.00-plus in the South).

FEEDER CATTLE:

Futures closed sharply lower. The market continues to be on the defensive, pressured by large discounts in deferred live contracts. Additionally, some saw the on feed report as further evidence of growing feeder cattle numbers and the likelihood of more aggressive placement activity through much of 2017. CME cash feeder index: 02/23: $127.20, off $0.21.

LEAN HOGS:

Futures closed moderately to significantly higher. Triple-digit gains characterized the front half of the board. While the lean market seemed to be on the defensive through most of the week thanks to softening fundamentals, the late-week rally was sponsored by pre-weekend short-covering and profit-taking. Pork cut-out: $81.91 (FOB Plant) up $1.65. CME cash lean 02/22: $77.73, up $0.09 (DTN Projected lean index for 02/23: $77.39, off $0.34).

MONDAY'S CASH HOG CALL:

Steady to $1.00 lower. Look for hog buyers to resume procurement chores on Monday with softer bids and nervousness regarding late-winter pork demand.

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

(ES)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]