DTN Closing Livestock Comments

GENERAL COMMENTS

Light cash cattle activity Tuesday surfaced in most area with some live biz marked at $126, roughly $1 lower than last week's weighted averages. Such unusual early week business seemed to be prompted by attractive basis opportunities. According to the closing report, the national hog base is $0.18 higher ($62-$71, weighted average $69.34). Corn futures closed nearly 3 cents higher with spot March hitting the best close in two months. Dry conditions in Argentina as well as spillover strength from K.C. wheat and beans were given much of the credit. Spook in part by the fear of rising interest rates, the stock market took it on the chin with the Dow closing 362 points lower and the Nasdaq losing 64.

LIVE CATTLE

Market watchers got their money's worth here as prices seemed to be all over the place. Live contracts broke hard in the early going, apparently swamped by long liquidation and outside market rumbling. Yet the sell-off moderated a good deal after midsession, perhaps supported by commercial short-covering and profit-taking. When the dust settled after the close, prices were no worse than mixed, up 22 to off 87 (most contracts finished 150 points or more above session lows). Beef cut-outs: higher, up $0.24 (select: $204.37) to $0.58 (choice: $209.69) with light-to-moderate demand and moderate offerings (56 loads of choice cuts, 34 loads of select cuts, zero loads of trimmings, 19 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL:

Steady to $2 higher. While price potential could take on greater definition at midweek, significant trade volume could still be delayed until Thursday or Friday. On the other hand, much may depend of further board action and basis opportunities.

FEEDER CATTLE:

Feeders experience a similar type of choppiness as the live market. Yet the recovery was a bit more impressive with issues settling mostly higher (up 17 to 95). CME cash feeder index: 01/30: $147.66, up $0.16.

LEAN HOGS:

Lean hog futures closed narrowly mixed, up 15 to off 52. Summer contracts are dipping toward 100-day moving averages. Bulls hope to draw a line in the sand near those levels, but the jury clearly remains out in that regard. The carcass value closed lower as softer demand for butts, picnics, ribs, and hams overshadowed loin and belly strength. Pork cut-out: $82.56, off $0.25. CME cash lean index for 01/26: $73.83, up $0.06 (DTN Projected lean index for 01/29: $73.84, up $0.01).

WEDNESDAY'S CASH HOG CALL:

Steady. Look for the cash trade to open near steady at midweek with country offerings and packer demand in rough balance.

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

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