DTN Closing Livestock Comments

Cattle Futures Close Week in State of Collapse

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

GENERAL COMMENTS

Light to moderate cattle trading was generally evident across the area with the best market test probably evident in the North. While prices were generally higher than last week, late week business softened somewhat from Thursday’s best. The National hog base closed off $0.42 compared with the Prior Day settlement ($54.00-$60.50, weighted average $59.00). From Friday to Friday, livestock futures scored the following changes: Dec LC off $1.35; Feb LC off $2.60; Jan FC off $2.98; Mar FC off $3.75; Dec LH up $2.02; Feb LH up $1.32. Corn futures closed .03 cents higher, supported by La Nina talk and possible threats of dry weather for South America. The stock market closed lower with the Dow off 40 and the NASDAQ down by 26.

LIVE CATTLE

Futures closed sharply lower, off 197-300. It would appear that disappointing beef demand following Thanksgiving has seriously spooked noncommercial buyers in live cattle. Massive long-liquidation today drove contracts to the lowest price level seen since mid-October. Note that all 2018 months finished below 40-day moving averages. Spot December now hopes to stabilize above its 100-day moving average early next week ($115.80). Beef cut-outs: higher on Choice and weak on Select (Choice, $205.99 up $1.35, Select $183.61 off $0.60) on light to moderate demand and moderate offerings (66 loads of choice cuts, 19 loads of select cuts, 18 loads of trimmings, 32 loads of coarse grinds).

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MONDAY'S CASH CATTLE CALL:

Steady. Monday’s activity will be typically slow as packers focus on the collection of new showlists. Ready numbers could be somewhat larger given limited trade volume in some areas. Also, feedlot managers could be increasingly mindful of Decembers short marketing window.

FEEDER CATTLE:

Futures closed sharply lower, off 87-425. Needless to say, buying interest quickly dried up here once deferred live cattle started dropping like a stone. Spot January will now look for support around $148.85, its 100-day moving average. CME cash feeder index: 11/30: $157.20, up $0.28.

LEAN HOGS:

Futures closed mostly higher, up 100 to off 15. Friday’s rally went far to offset defensiveness seen early in the week. Indeed, with February closing well above $70.00, early week defensiveness looks no more harmful than short-term profit-taking. Keep in mind that spot December is set to expire a week from next Thursday, December 14. Pork cut-out: $83.35 (FOB Plant) off $0.05. CME cash lean 11/29: $62.99, up $0.03 (DTN Projected lean index for 11/30: $63.26, up $0.27).

MONDAY'S CASH HOG CALL:

Steady to $1 lower. Hog buyers are expected to resume procurement chores on Monday with steady/weak bids.

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

(BE)

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John Harrington

John Harrington
Connect with John: