NEWS
Mon Aug 31, 2015 03:51 PM CDT
DTN Closing Livestock Comment 08/31 15:51 Lean Hog Futures Bolt Significantly Higher Hog contracts settled sharply higher thanks to aggressive short covering and bull spreading. Conversely, live and feeder futures closed lower as specs and commercial recoiled from last week's late rally. By John Harrington DTN Livestock Analyst GENERAL COMMENTS: Buying energy in feedlot country Monday was limited to the collection of new showlists. For the most part, the pre-Labor Day offering looks generally smaller than last week with only Colorado offering more ready steers and heifers. Some initial asking prices were posted around $150 in the South and $232-plus in the North. According to the closing report, the Iowa hog base is $0.56 lower compared with the Prior Day settlement ($65.00-$72.00, weighted average $71.56). Corn futures finished fractionally mixed with neither side displaying much trading interest. The stock market closed lower as investors digested a volatile month amid continued uncertainty about China and the Fed. The Dow closed 114 points lower with the Nasdaq off 51. LIVE CATTLE: While live futures spent some time on both sides of unchanged through the day, final settlements were posted 62 to 122 lower. Those hoping that recovery-minded buyers would pick up right where they left off on Friday were disappointed. October and December quickly attracted selling interest near Friday's high. It seems safe to say that cash prospects immediately before the Labor Day break remain guarded. Spot August expired at Beef cut-outs: significantly lower, off $0.91 (select, $232.04) to $0.98 (choice, $242.24) with light demand and light-to-moderate offerings (62 loads of choice cuts, 20 loads of select cuts, 9 loads of trimmings, 21 loads of coarse grinds). TUESDAY'S CASH CATTLE CALL: Steady. The combination of last week's relatively short buy and the pending holiday makes it tough to predict the timing of this week's cash business. While trade volume could surface sooner than expected, action on Tuesday will probably be slow. FEEDER CATTLE: At the conclusion of a fairly choppy session, feeder contracts closed 57 to 222 lower, pressured by spillover selling from the live market and negative vibes stemming from the plummeting behavior of the cash index. On estimated receipts of 6,500 head (down from 7,637 last week and not comparable with last year's holiday). Oklahoma City sold steers and heifers mostly firm to $2 higher. CME cash feeder index: 08/28: $206.35, off $3.50. LEAN HOGS: Lean issue opened the week with a good head of steam, generally settling 35 to 160 higher. Nearby contracts gained significantly on deferreds thanks to bull spreading and the unwinding of bear spreads. Oct and Dec were well supported on ideas that the board had already traded a fall bottom. Spot October closed just above its 100-day moving average and at its highest peak since June 11. Carcass value jumped higher, supported by better demand for all primals except the rib. Particular strength was noted in belly and picnic cuts. Pork cut-out: $85.84, up $1.31. CME cash lean 08/27: $78.28, off $0.40 (DTN Projected lean index for 08/28: $77.70, off $0.58) TUESDAY'S CASH HOG CALL: Steady. The cash hog trade should hold about steady in the morning, supported somewhat by Monday's fairly light run and stronger carcass value. John A. Harrington can be reached at john.harrington@dtn.com (CZ) Copyright 2015 DTN/The Progressive Farmer. All rights reserved.