DTN Closing Livestock Comments

Most Hog Futures Close Sharply Higher in Face of Prospects for Record Production

John Harrington
By  John Harrington , DTN Livestock Analyst
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(DTN file photo)

GENERAL COMMENTS

Moderate cattle trading surfaced in parts of the North Friday. Dressed sales were mostly marked at $172, $1 to $2 higher than last week's weighted average basis Nebraska. Some live business in Nebraska and Iowa was marked at $108, $1 lower than last week's weighted average basis Nebraska. The National hog base closed up $0.54 compared with the prior day settlement ($42.00-$49.50, weighted average $47.75). From Friday to Friday, livestock futures scored the following changes: Oct LC off $2.47; Dec LC off $2.17; Oct FC off $3.88; Nov FC off $3.62; Oct LH off $0.30; Dec LH up $3.33. Corn futures closed 2 to 3 cents higher, thanks to spillover buying from the bean market and a Sept. 1 corn stock total that was somewhat smaller than anticipated. Having said that, the corn stock total (2.295 billion bushels) was the largest seen in 30 years. The stock market closed higher with the Dow up 23 and the Nasdaq up 42.

LIVE CATTLE

Futures closed mixed, up 20 to off 70. The late-week action was rather lackluster with nearbys gaining modestly on deferreds. Large chart gaps created on Monday now stand as tough overhead resistance for would-be bulls to deal with. Beef cut-outs: steady to weak (choice, $196.62 up $0.21; select $188.50, off $0.61) on light-to-moderate demand and moderate offerings (59 loads of choice cuts, 28 loads of select cuts, 08 loads of trimmings, 25 loads of coarse grinds).

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MONDAY'S CASH CATTLE CALL:

Steady. Monday's activity will be typically limited to the distribution of showlists. If feedlots decided to carry over unsold cattle into next week, the early month offering could be somewhat larger.

FEEDER CATTLE:

Futures closed moderately lower, off 62 to 105. Feeders were pressured by profit-taking, long-liquidation and modest strength in the corn market. CME cash feeder index: 09/28: $153.06, up $0.98.

LEAN HOGS:

Futures closed mixed, but mostly sharply higher, off 15 to up 170. Spot October was the only contract to settle in the red, modestly pressured by the downward drift of the cash index. Even though the Hogs and Pigs report pointed toward record production in 2018, oversold futures bounced significantly higher. In addition to forces of technical correction, deferreds were supported by news of aggressive pork export sales last week. (i.e., totaling 36,700 metric tons, a marketing-year high). Pork cut-out: $73.33 (FOB Plant) up $0.88. CME cash lean 09/27: $55.54, off $0.71 (DTN Projected lean index for 09/28: $54.84, off $0.70).

MONDAY'S CASH HOG CALL:

Steady. The cash hog trade is likely to start out near steady when business resumes on Monday. Given the significant abuse the cash hog trade suffered through September, we may be due for at least a short period of stability.

For more from John, see www.feelofthemarket.com

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John Harrington

John Harrington
Connect with John: