DTN Closing Livestock Comments

Closing Comments

The North feedlot trade turned fairly active through the morning with Nebraska and Iowa reporting most dressed deals marked at $200, generally $4 higher than last week's weighted averages. According to the closing report, the national hog base is $0.26 higher ($62.00-71.25, weighted average $67.65). Corn futures finished 2-3 cents lower, pressured by profit-taking and reconsideration of E15 rumors that played hot earlier in the week. The stock market closed lower with the Dow off 112 points and the Nasdaq off 42.

LIVE CATTLE:

Apparently, there's nothing board bulls hate more than friendly cash news. Whatever the strange reasoning, live contracts closed sharply lower even while Northern feedlots sold live inventory at the highest price level since the early summer of 2016. Contracts settled off 62 to 142, pressured by long liquidation and nervous talk about the sustainability of beef demand. April closed right on its 40-day moving average (i.e., 116.15). Technically speaking, this would be a good place to catch. Beef cut-outs: sharply higher, up $0.85 (select, $203.72) to $1.67 (choice, $208.35) with moderate demand and light offerings (52 loads of choice cuts, 18 loads of select cuts, 4 loads of trimmings, 13 loads of coarse grinds).

FRIDAY'S CASH CATTLE CALL:

Steady/firm with best seen on Wednesday and Thursday. Although scattered clean-up biz is possible here and there, it seems like a good bet that trading is essential done for the week.

FEEDER CATTLE:

The feeder market closely followed the uninspired behavior of the live trade. Feeder issues settled off 67 to 197. Spot March seems trapped in a lateral trading range (at least since the first of the year) between its 40-day moving average (125.57) and its 100-day moving average (121.95). CME cash feeder index: 03/01: $126.44, off $0.59.

LEAN HOGS:

At the conclusion of a very slow session, lean hog futures finished mostly 2 to 37 lower. Spot April seemed to trigger renewed selling interest near overhead resistance at $69.22 (i.e., the 40-day moving average). Carcass value closed sharply lower, especially torpedoed by a $9.41 drop in the belly primal. Pork cut-out: $80.16, off $1.46. CME cash lean index for 02/28: $74.77, off $1.12 (DTN Projected lean index for 03/01: $74.01, off $0.76).

FRIDAY'S CASH HOG CALL:

Steady. Look for the late-week cash trade to open with basically steady bids. Saturday's hog kill is expected to total close to 130,000 head.

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

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