DTN Closing Livestock Comments

GENERAL COMMENTS

Scattered dressed sales were reported in parts of the North at mostly $225, $5 lower than last week's weight average. However, for the most part, the cash cattle trade remained untested. According to the closing report, the national hog base is $1.96 higher ($61.00-$69.00, weighted average $66.98). The corn market closed modestly higher, supported by short-covering and positioning before the release of new s&d tables on Wednesday. The stock market closed mixed with the Dow off 36 points and the Nasdaq up by 17.

LIVE CATTLE

Live issues opened significantly higher, and for a minute there, it looked as if bulls had confidently reclaimed the playing field. Yet psychology started to sour near midsession as waves of long liquidation began to push prices lower. At the end of the day, prices settled off 172 to 280, as much as 350 to 450 points below session highs. Traders are clearly nervous that the spring's red-hot cash trade is set to run out of gas. Beef cut-outs: higher, up $0.14 (select, $223.03) to $0.72 (choice, $242.16) with light-to-moderate demand and offerings (48 loads of choice cuts, 34 loads of select cuts, 12 loads of trimmings, 24 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL:

Steady to $2 lower. Look for at least bids and asking prices to take on greater definition at midweek. Much may depend upon the tone of futures.

FEEDER CATTLE

Following the same wild ride of live contracts, feeder issues opened strong and finished weak. Indeed, August through January settled down the 450-point limit. CME cash feeder index: 05/08: $147.73, off $0.35.

LEAN HOGS

Somehow lean hog futures managed to pretty much ignore the reckless roller-coaster action that spilled through the cattle complex. Prices here settled narrowly nixed (i.e., up 40 to off 30) in light trade volume. Overall, nearby contracts seemed to be better supported than deferreds. The carcass value surge higher Tuesday with all major primals throwing weight to the harness. Pork cut-out: $78.99, up $0.21. CME cash lean index for 05/05: $64.79, up $1.24, (DTN Projected lean index for 05/08: $65.98, up $1.19).

WEDNESDAY'S CASH HOG CALL

$1-$2 higher. Look for hog buyers to be fairly aggressive at midweek as numbers tight and product demand improves.

For more from John, see www.feelofthemarket.com

(CZ)

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