DTN Closing Livestock Comments

GENERAL COMMENTS

The cash cattle market was never in play with buyers and sellers focusing more on shopping lists and eggnog than showlists and slaughter schedules. According to the closing report, the national hog base is $0.65 higher ($50-$57.20, weighted average $56.26). The corn market settled fractionally higher, recovering a bit from new contract lows made earlier in the week. The stock market closed lower with the Dow off 28 points and the Nasdaq off 5.

LIVE CATTLE

Live contracts finished mostly 20 to 130 lower with Feb through Jun catching the real heat of the selling. While the board has struggled through the week, the Dec. 1 on-feed report proved to be a late-week speed bump of note: on feed, up 8%; placed in Nov, up 14% (swamping the pre-report guess of up 6-7%); marketed in Nov, up 3%. Only soon-to-expire spot Dec managed to finish positively (i.e., at $119.82, up 20). Beef cut-outs: higher, up $1.01 (select: $187.88) to $1.44 (choice: $199.56) with light to moderate demand and light offerings (44 loads of choice cuts, 18 loads of select cuts, 9 loads of trimmings, 11 loads of ground beef).

TUESDAY'S CASH CATTLE CALL:

Steady. When traders reconvene next Tuesday, the assessment of new showlists will be about the only thing on the early week agenda.

FEEDER CATTLE:

Feeder futures collapsed with triple-digit losses, off 100 to 185. The faltering target of deferred live futures obviously discouraged commercial and specs from taking on the long side here. March closed at its lowest level since Aug. 31. CME cash feeder index: 12/21: $149.92, off $1.92.

LEAN HOGS:

If cattle traders cringed at late=week supply news from USDA, hog traders embraced the government snout-count like sugar-high kids storming the Christmas tree. The Dec. 1 H&P report came in essentially on target: all hogs, up 2%; kept for breeding, up 1%; kept for marketing, up 1%. In the face of such well-anticipated news, lean contracts only got stronger, closing mostly 42 to 170 higher. Feb and August closed the week well above 40-day moving averages. Further Aug and Oct managed to set new contract highs. The trade may have also be made jolly by the fact that frozen pork stocks as of Nov. 30 totaled no more than 504.9 million pounds, 14% below the previous month and 3% short of 2016. The carcass value held about steady with strength in processing items countering weakness in picnic and ribs. Pork cut-out: $77.23, off $0.02. CME cash lean index for 12/20: $62, off $0.38 (DTN Projected lean index for 12/21: $61.76, off $0.24).

TUESDAY'S CASH HOG CALL:

Steady. Look for hog buyers to return from the long holiday break ready to pay steady money in the country.

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

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