DTN Closing Livestock Comments

Cattle Futures Slam Higher With Triple-Digit Gains

(DTN file photo)

GENERAL COMMENTS

Feedlot country saw a few more bids Wednesday (e.g., $118 live; $188-$190 dressed), but nothing exciting enough to draw the least bit of selling interest. According to the closing report, the national hog base is $0.07 lower ($62-$71.50, weighted average $69.64). Nearby corn futures jumped 4 cents higher, the biggest one-day pop since mid-November. Trade sources credited commercial buying and a general lack of selling interest. The stock market roared back to life following Tuesday's set-back with the Dow closing 322 points higher (over 26,000 ever) and the Nasdaq settling up 74.

LIVE CATTLE

Ignoring softer wholesale beef business, live contracts rocketed to near-two-week highs. Supported by aggressive short-covering, technical-buying and cash optimism, prices here erupted by 152 to 287 points. Spot February closed right at its 40-day moving average and 100-day moving average. If we could somehow manage to gap above this nexus in the morning, the high of Jan. 4 ($123.62) could be quickly challenged. April and June nosed above 40-day moving averages on the close. Beef cut-outs: lower, off $0.28 on both choice and select (choice: $205.30; select: $199.61) with light-to-moderate demand and offerings (71 loads of choice cuts, 29 loads of select cuts, 10 loads of trimmings, 16 loads of ground beef).

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THURSDAY'S CASH CATTLE CALL:

Steady to $2 higher. In the wake of the strong midweek rally, feedlot managers should display even greater resolve in terms of higher asking prices (e.g., $122-$123 in the South; $195-$197 in the North). Such bullish psychology could easily delay the development of significant trade volume until Friday.

FEEDER CATTLE:

Following the bullish lead of the live trade, feeders pushed prices sharply. Final gains ranged from 172 to 240. For the first time in months, the spot contract has nearly $3 over the cash index. January and March close above 40-day moving averages. CME cash feeder index: 01/16: $145.01, off 37.

LEAN HOGS:

Lean futures closed mostly lower with the front end getting hit worse than nearbys. Wednesday's round of weakness seemed little more than profit-taking. Certainly nothing happened of technical significance. The carcass value closed modestly higher with strength in ribs, butts and picnics overshadowing weakness in bellies and loins. Pork cut-out: $80.95, up $0.24. CME cash lean index for 01/15: $71.92, up $0.77 (DTN Projected lean index for 01/16: $71.99, up $0.07).

THURSDAY'S CASH HOG CALL:

Steady. Forces of supply and demand seem to be roughly balanced at midmonth. Look for opening bids in the morning to be about steady.

John A. Harrington can be reached at harringtonsfotm@gmail.com

(BE)

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