DTN Closing Livestock Comments

Cattle Futures Close Week with Triple-Digit Gains

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

GENERAL COMMENTS

Moderate cattle trading developed in most areas just before the weekend break as feedlot managers responded to higher packer bids. Live business in the South ranged from $118-$120, $1 to $3 higher. Most dressed sales in the North were marked at $190, generally $3 higher than last week's weighted average basis Nebraska. The national hog base closed off $0.13 compared with the prior day settlement ($50-$57.85, weighted average $56.47). From Friday to Friday, livestock futures scored the following changes: Dec LC up $3.33; Feb LC up $2.72; Jan FC up $2.53; Mar FC up $2.23; Feb LH off $0.33; Apr LH off $0.32. Corn futures closed about a penny lower, stifled by the same old factors of larger supplies and lackluster export demand. Encouraged by growing prospects of a tax cut prior to Christmas, the stock market closed with new highs. The Dow finished up 122 with the Nasdaq better by 80.

LIVE CATTLE

Futures closed sharply higher, up 55 to 262. Uncertain of cash potential earlier Friday morning, live issues opened on a mixed basis, but as bullish signs in the country increased, so did buying interest at the CME. Spot December closed at its highest level since Nov. 30. All contracts successfully reaffirmed chart support at the 100-day moving average. Indeed, most contracts settled the week above moving average highs. Beef cut-outs: higher on choice and weak on select (choice, $201.87 up $0.83, select $183.25 off $0.44) on light-to-moderate demand and moderate offerings (75 loads of choice cuts, 20 loads of select cuts, 10 loads of trimmings, 16 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady to $2 higher. Monday's activity will be limited to the distribution of new showlists. We anticipate ready numbers will be about steady, though feedlot managers are not likely to hesitate in pricing ready steers and heifers higher.

FEEDER CATTLE:

Futures closed sharply higher, up 80 to 160. Although feeders followed their live counterparts higher Friday, they did not enjoy the same amount of strength through the week. Indeed, most feeder contracts at this time appear to be trapped below 100-day moving averages, trapped despite the fact of the cash index premium. It would appear that feedlot managers are insisting upon wider feeder-fat spreads before placing more cattle against next summer. CME cash feeder index: 12/14: $154.40, up $0.09.

LEAN HOGS:

Futures closed higher, up 15 to 90. Lean contracts closed with decent progress, supported by late-week short-coving and spillover buying from the cattle complex. Given the fact that the Dec. 1 Hogs and Pigs report will be released next Friday, it seems like a good bet that prices will assume a choppy trading pattern through next week. Pork cut-out: $77.57 (FOB Plant) up $0.26. CME cash lean 12/13: $64.64, off $0.22 (DTN Projected lean index for 12/14: $64.11, off $0.53.

MONDAY'S CASH HOG CALL:

Steady to $1 lower. Hog buyers should start out on Monday in a cautious frame of mind, mindful of the long holiday weekend ahead.

John Harrington can be reached at feelofthemarket@yahoo.com

Follow John Harrington on Twitter @feelofthemarket

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John Harrington