DTN Closing Livestock Comments

Closing Comments

The cash cattle trade was not tested Friday with necessary business completed on Wednesday and Thursday. For the most part, live sales in the South were basically steady ($125.00) this week while dressed deals in the North were marked as much as $4.00 higher ($200.00). The national hog base closed off $0.54 compared with the Prior Day settlement ($61.00-$69.50, weighted average $67.38). From Friday to Friday, livestock futures scored the following changes: Apr LC Up $1.02; Jun LC up $1.90; Mar FC Up $2.52; May FC Up $1.33; Apr LH Off $1.27; May LH Off $1.22. Corn futures closed 1 to 2 cents higher, supported by positive attitudes regarding export strength and the possibility of greater E15 sales through the year. The stock market closed modestly higher with the Dow up 2 points and the NASDAQ better by 9.

LIVE CATTLE:

Futures closed mostly higher, up 72 to off 17. Despite late-week short-covering, live issues finished the week still well below the feedlot cash trade. New spot April tried to rally toward cash early in the week, but was met with renewed selling near resistance at 119. The stubbornness of nearby April suggests that many traders are nervous about the sustainability of either tight fed numbers or strong beef demand. Beef cut-outs: weak on choice and firm on select (choice, $208.07 off $0.28, select $204.05 up $0.33) on light-to-moderate demand and moderate offerings (53 loads of choice cuts, 17 loads of select cuts, 03 loads of trimmings, 22 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady to $2 higher. Activity on Monday with be limited to the distribution of new showlists. At this point, we expect ready numbers to be about steady with late February.

FEEDER CATTLE:

Futures closed higher up 10-102. Feeder contracts didn't make much progress this week. Indeed, the market continues to churn back and forth in a fairly narrow range. Spot March remains nearly $3.00 below the cash index. CME cash feeder index: 03/02: $126.61.

LEAN HOGS:

Futures closed mostly sharply lower off 5-152. The defensive tone in lean hogs seems to be linked to worries about tightening packer margins and their willingness to support cash prices as tonnage remains relatively large. Note that summer months continue to carry a $10.00 premium to spot April, supporting ideas that stronger cash will develop later this spring once the heart of the large fall pig crop has been digested. Pork cut-out: $80.63 (FOB Plant) up $0.47. CME cash lean 03/01: $74.01, off $0.76 (DTN Projected lean index for 03/02: $73.38, off $0.63).

MONDAY'S CASH HOG CALL:

Steady to $1.00 lower. Hog buyers are expected to remain on the defensive when they return for work early next week.

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

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