DTN Closing Livestock Comments
Beef Futures Exit February With Triple-Digit Gains
The cash cattle trade remained untested with just a few bids (e.g., $123 in parts of the South) and asking prices (e.g., $200-$202) evident. According to the closing report, the national hog base is $0.24 lower ($63.00-$68.50, weighted average $67.25). Closing well off session highs, corn futures still managed to settle 5-6 cents in the green, supported by rumors that the Trump administration was poised to make some price-friendly changes in ethanol policy, possible expanding the year-long use of E15. The stock market closed lower with the Dow off 25 points and the Nasdaq down by 36.
LIVE CATTLE:
Live issues jumped sharply higher, advancing as much as 80 to 242 points. With spot Feb expiring at such a large premium to April and June, it didn't see tough to attract new buying interest. Needless to say, it will be interesting to see how quickly new spot April chooses to close the gaps with feedlot cash. Beef cut-outs: sharply higher, up $3.25 (choice, $204.73) to $4.27 (choice, $201.35) with moderate to fairly good demand and light offerings (48 loads of choice cuts, 22 loads of select cuts, 13 loads of trimmings, 19 loads of coarse grinds).
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WEDNESDAY'S CASH CATTLE CALL:
Steady to $2 higher. Look for cash potential to start taking on greater definition at midweek. Yet the market may not be fully tested until sometime Thursday or Friday.
FEEDER CATTLE:
Feeders followed the bullish lead of the live market and closed 82 to 162 higher. Sooner or later, growing equity in the feedlot sector seems likely to build a bigger fire under demand for replacement steers and heifers. CME cash feeder index: 02/27: $126.96, off $0.10.
LEAN HOGS:
Slowly trading in the bullish shadow of live and feeder futures, lean hogs settled mixed (i.e., up 40 to off 52) in lackluster trade volume. With the cash index steadily eroding, spot April seems unbothered by its deep discount. Carcass value rebounded Tuesday with all primals scoring substantial progress except the loin. Pork cut-out: $81.94, off $1.10. CME cash lean index for 02/24: $76.72, off $0.67 (DTN Projected lean index for 02/27: $75.89, off $0.83).
WEDNESDAY'S CASH HOG CALL:
Steady. Midweek business is likely to commence with generally steady bids, perhaps helped a bit by stabilizing carcass value.
John A. Harrington can be reached at john.harrington@dtn.com
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