As far as we can tell, the cash cattle trade remains dead quiet as we move toward the end of the day Friday. Some live bids have improved up to 122 in both the North and South, but still remain $2-$3 below asking prices. While we assume light-to-moderate trading will develop before nightfall, we sure can't prove it yet. The national hog base closed up $0.34 compared with the prior day settlement ($54-$58.73, weighted average $58.27). From Friday to Friday, livestock futures scored the following changes: Dec LC up $3.18; Feb LC up $2.98; Jan FC up $4.45; Mar FC up $4.12; Feb LH up $1.80; Apr LH up $0.88. Corn futures closed between 1 and 2 cents lower in typically lackluster business. The stock market closed lower with the Dow off 118 and the Nasdaq down by 46.
Futures closed mixed, off 155 to up 30. Spot December expired before the New Year's break closing at 123, off 155 points. Nearby futures may have been better supported through this session had packer spending become more apparent. But with nothing to hang their hats on in that regard, late-year buying interest seemed to fizzle. Needless to say, cash business late Friday could easily shape the board's opening when trade resumes on Tuesday. Beef cut-outs: firm to higher (Choice, $202.90 up $0.62, Select $192.98 up $2.07) on light-to-moderate demand and light offerings (53 loads of choice cuts, 17 loads of select cuts, 01 loads of trimmings, 11 loads of coarse grinds).
TUESDAY'S CASH CATTLE CALL:
Steady to $2 higher? It is difficult to predict a trend for next week when this week's cash market has not been developed yet. Having said that, we assume a firming product trade early next week as retailers move to restock shelves. At any rate, Tuesday will probably be limited to the distribution of new showlists.
Futures closed moderately higher. Light short-covering worked to lift feeder values before traders exited for the year. Note that spot January will start the new year nearly even with the cash index. CME cash feeder index: 12/28: $146.51, up $0.63.
Futures closed narrowly mixed, up 22 to off 50. Although Friday's action was not very informative, lean futures have clearly closed 2017 on an upbeat note. This is especially true given the documentation of significant herd expansion in last week's Hogs and Pigs report. Apparently, spot February is unafraid to lead the early year cash market higher. Indeed, it will start out on Tuesday fully $10 above the most recent cash index. Pork cut-out: $78.22 (FOB Plant) up $0.19. CME cash lean 12/27: $61.58, off $0.01 (DTN Projected lean index for 12/28: $61.72, up $0.14.
TUESDAY'S CASH HOG CALL:
Steady to $1 higher. Look for cash hog buyers to launch 2018 with steady/firm bids. Seasonally, we should be past the peak offering of the fourth quarter with more manageable numbers in store over the next several months.
John A. Harrington can be reached at email@example.com
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