DTN Closing Livestock Comments

GENERAL COMMENTS:

The Iowa Daily Direct Hog Base closed $0.11 higher compared to the prior day's closing weighted average in a range of $48.00 to $51.00; weighted average $50.56. Corn futures closed up 2 1/2 cents in the December and up 2 cents in the July.

LIVE CATTLE:

Live cattle futures turned sharply lower late Thursday; the December contract fell under $130 per cwt before markets settled. The pullback across the complex is not a surprise given the significant move higher over the past two trading sessions. However, the inability to hold early session highs Thursday and beef values which continued to move lower on the morning report are indicating the midweek rally may be somewhat overstated. This could create some additional market swings over the next couple sessions. The upcoming Thanksgiving holiday with light trade expected and the Cattle on Feed report Friday afternoon will also add additional volatility to the already unsettled market. Beef cut-outs: lower, off $1.85 (choice, $204.83) to down $3.36 (select, $193.34) with light demand and light to moderate offerings (80 loads of choice cuts, 50 loads of select cuts, 22 loads of trimmings, 23 loads of coarse grinds).

FRIDAY'S CASH CATTLE CALL:

Steady to $2 lower. Cash market activity remains at a standstill and at this point may be delayed until late Friday after the release of the Cattle on Feed report. Bids are still undeveloped in both the North and the South, which is creating some additional uncertainty as to where market activity will end up, although asking prices have remained relatively unchanged from $130 and higher in the South through the last couple of days.

FEEDER CATTLE:

November feeder cattle futures settled 35 cents higher in light trade, while all other contracts posted sharp, triple-digit losses Thursday. The lack of support through the end of the session created a bearish tone from what started out as light position-taking early in the trading session. CME cash feeder index: 11/18: $175.77, down $0.95.

LEAN HOGS:

Firm buyer support developed in nearby futures with December contracts leading the complex higher, settling $1.02 per cwt higher. The ability to establish prices over $55 per cwt Thursday has created a moderate range over contract lows set early in the week. If traders can hang on to current support levels near $55 per cwt and build additional technical support with this, there may be additional room for market support that could advance through the end of November. Deferred contracts posted light to moderate losses due to light trade volumes as most of the trade interest Thursday was focused on front-month December contracts. The pork carcass cut-out rose nicely on strength in loins (+$4.60), ribs (+$2.35), hams (+$2.27) and bellies (+$4.13). Butts were $0.54 lower and picnics $2.02 lower. Pork cut-out: $74.39, up $2.20. CME cash lean 11/16: $56.49, off $0.48 (DTN Projected lean index for 11/17: $56.04, off $0.45).

FRIDAY'S CASH HOG CALL:

Steady to $1 lower. Generally weaker market prices are expected through the end of the week as packers continue to have little difficulty sourcing hogs to fuel not only heavy end-of-the-week procurement schedules, but also aggressive plant schedules through the holiday week. Most prices are likely to be seen closer to steady to weak, but the full extent of the range is expected to press markets lower.

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

(AG)

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