The cash cattle market constituted a dead zone with poorly defined bids and asking prices separated by as much as $6-$7 on a live basis. Understandably, the value assessment of feedlots rose through the day as the live board steadily rallied. According to the closing report, the national hog base is $0.61 higher ($53-$59, weighted average $57.95). Corn futures drifted 1-2 cents lower, pretty much stuck in the same sad range it's shambled through since mid-November. The stock market closed higher with the Dow up 63 points and the Nasdaq positive by 10.
Live issues closed impressively higher, up 37 to 252, supported by late-year short-covering and cash optimism. Expiring December went off the board Thursday at $124.55 (up $2.52), its best finish since Nov. 7. New spot February will take the point Friday more than 200 behind the last stretch made by December. Feb and April now face overhead resistance near 40-day moving averages (i.e., $123.50 and $124.10, respectively). Beef cut-outs: higher, up $0.49 (select: $190.91) to $0.68 (choice: $202.28) with light-to-moderate demand and moderate offerings (89 loads of choice cuts, 34 loads of select cuts, 14 loads of trimmings, 13 loads of ground beef).
FRIDAY'S CASH CATTLE CALL:
Steady to $2 higher. With 2017 running out of rope and short-bought packers running out of cattle, buyers will have to find a way to pry at least moderate numbers away from bullish-minded feedlots on Friday. That probably means higher bids at some point.
Feeders settled moderately higher, but once again following live futures at a slower pace. While January and March have bounced off pre-Christmas lows, nearbys remain trapped between moving average lows and moving average highs. CME cash feeder index: 12/27: $145.88, off $2.68.
Lean contracts closed moderately higher, supported by firmness in the cash and product markets. Technical-buying interest also seemed helpful. Summer contracts will move into the last trading day of the calendar year within striking distance of new contract highs. The carcass value jumped more than a buck higher thanks to the help of firming belly (up $6.13) and loin (up $2.53) sales. Pork cut-out: $77.23, off $0.02. CME cash lean index for 12/26: $61.59, off $0.03 (DTN Projected lean index for 12/27: $61.58, off $0.01).
FRIDAY'S CASH HOG CALL:
Steady to $1 higher. Staring in the face of ambitious Saturday kill plans (around 385,000 head), some buyers will still be looking for hogs in the morning.
John A. Harrington can be reached at email@example.com
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