DTN Closing Livestock Comments

GENERAL COMMENTS:

The Iowa Daily Direct Hog Base closed $0.57 lower compared to the prior day's closing weighted average in a range of $46.00 to $51.00; weighted average $50.47. Corn futures closed down 1/4 cent in the December and up 1/4 cent in the July.

LIVE CATTLE:

December live cattle futures led the market higher, settling just under limit-higher closing prices up $2.95 per cwt Wednesday. The support pushed prices to $130.97 per cwt. This helped instill additional market support, breaking through both support levels. It also hinted at the potential for additional end-of-week follow-through buying activity that may develop. Strong triple-digit gains were seen through all nearby contracts. Beef cut-outs: lower, off $1.69 (choice, $206.68) to down $1.23 (select, $196.70) with light to moderate demand and offerings (89 loads of choice cuts, 41 loads of select cuts, 41 loads of trimmings, 33 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

Steady to $2 lower. Cash cattle trade remains undeveloped at midweek with just a few asking prices in the South at $130 to $133. But so far, bids are nowhere to be seen and active trade is expected to be pushed off until Thursday or Friday.

FEEDER CATTLE:

Sharp gains quickly developed through feeder cattle futures markets Wednesday as $2 to $3 per cwt gains held through all but November contracts. The support seen through the complex is based on the idea that oversold positions are taking advantages of the aggressive market pressure seen during the middle of November following the aggressive October rally. This could help to spark some late-month buyer support despite trade volume likely remaining light due to the Thanksgiving holiday. CME cash feeder index: 11/17: $176.72, up $0.28.

LEAN HOGS:

Lean hog futures closed mixed as traders backed away from early gains across the entire livestock complex. The strong market support which developed Tuesday is creating some concern that follow-through buyer support may be running out of steam. Cash hog market support is not following the upward trend of futures markets, which may limit any additional buyer interest into the Thanksgiving holiday week, and stall any previous market momentum. The pork carcass value rebounded slightly on Wednesday. Picnics were $2.24 higher and bellies were $0.23 higher. Loins were $0.29 lower, butts $0.18 lower, ribs $0.63 lower and hams $0.51 lower. Pork cut-out: $72.19, up $0.16. CME cash lean 11/16: $56.49, off $0.48 (DTN Projected lean index for 11/17: $56.04, off $0.45).

THURSDAY'S CASH HOG CALL:

Steady to $1 Lower. Cash spending is expected to continue to follow the same pattern through the last half of the week as it did the first half. Packers are expected to focus on a general trend of steady to $1 lower with most bids likely to remain steady to weak. Saturday procurement levels will likely be over 200,000 head at this point with the expectation that packers will try to keep production capacity strong through the holiday week.

Rick Kment can be reached at rick.kment@dtn.com

(AG)

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