DTN Closing Livestock Comments

GENERAL COMMENTS

Cash cattle activity remained quiet with only scattered bids developing earlier in the day. Packers continue to bid $114 to $115 per cwt on a live basis in all areas. Bids for dressed basis cattle have been unavailable so far this week. Asking prices remain at $119 to $120 per cwt at midweek with no indication that feedlot managers will back away from these levels in the near future. The Fed Cattle Exchange Auction on Wednesday listed a total of 704 head, with 75 actually sold, 246 head listed as unsold, and 383 head listed as PO (Passed Offer). The state-by-state breakdown looks like this: Kansas 318 total head, with 75 head sold at $116.00, 59 head unsold, 184 head listed as PO ($116.00); Nebraska 121 total head, with 0 head sold, 121 head unsold, and 0 head listed as PO; Texas 265 total head, with 0 head sold, 66 head unsold, and 199 head listed as PO ($116.00); Coorado -- no cattle reported; Iowa -- no cattle reported; other states -- no cattle reported. The delivery date/weighted average breakdown is as listed: 1-9 day delivery: 704 head total, 75 head sold, with a weighted average price of $116.00; 1-17 day delivery -- no cattle reported; 10-17 day delivery -- no cattle reported; 17-30 day delivery -- no cattle reported. According to the closing report, the national hog base is $1.08 lower compared with the Prior Day settlement ($50.00-$59.20) weighted average $57.04. The corn futures moved higher in light activity. March futures were 1 cent higher Wednesday. The Dow Jones Index is 114 points higher with the Nasdaq up 17 points.

LIVE CATTLE

Moderate to firm losses developed in live cattle futures following the strong declines in feeder cattle ($0.50 to $0.77 lower). The recent pressure in all feeder cattle markets as well as sluggish market fundamental support at midweek quickly replaced early morning gains and is establishing a weaker tone in the entire complex. There is the potential for even more market weakness through the end of the week. Prices still remain above support levels. Beef cut-outs: lower, $0.90 higher (select, $185.02) and down $1.58 (choice, $202.48) with light to moderate demand and heavy offerings (87 loads of choice cuts, 27 loads of select cuts, 20 loads of trimmings, 18 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

Steady. Activity remains quiet through cash cattle country at midweek with scattered bids. Bids are expected to redevelop early Thursday morning in the same range as seen at midweek.

FEEDER CATTLE:

Triple-digit losses quickly moved into the feeder cattle complex as prices turned lower following early morning support ($0.75 to $1.57 Lower). These sharp losses led to additional pressure in the entire cattle complex. This has pulled back additional support from the entire market with increased concern that the recent buyer activity may evaporate through the next several days. CME cash feeder index for 12/12 is $153.64 down $0.25.

LEAN HOGS:

Light buying slowly trickled into the lean hog complex late day Wednesday which offset pressure seen during the first half of the trading session ($0.15 Lower to $0.35 Higher). Lack of direction in the lean hog complex continues to be the main focus, following the volatility through the market. This may spark some additional pressure through the rest of the week. But traders continue to look for a sense of stability over the next couple of weeks. Carcass values tumbled sharply lower with aggressive losses in ham and belly markets while most other primals posted moderate losses. Pork cut-out: $76.51 down $4.61. CME cash lean index for 12/11 $64.97, down $0.20. DTN Projected lean index for 12/12 $64.86 down $0.11.

THURSDAY'S CASH HOG CALL:

Steady to $1 Lower. Very little movement is expected to develop across the complex with additional pressure likely to be seen through the end of the week. But most bids are expected to be seen steady to 50 cents per cwt lower early in the day Thursday. Plant runs are expected to be at 465,000 Thursday with 247,000 expected Saturday.

Rick Kment can be reached at rick.kment@dtn.com

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