DTN Closing Livestock Comments

GENERAL COMMENTS:

The cash cattle trade was preempted Tuesday with serious weather problems. Hence, bids and asking prices remained poorly defined. A few steers and heifers in Texas were priced close to $142. The Iowa hog base closed $0.75 lower compared with the Prior Day settlement ($60-$61.50, weighted average $61.00). Corn futures closed 1-2 cents higher, supported by short-covering in light trade volume. Equities closed sharply lower as renewed declines in oil prices weighed amid mixed reaction to some key earnings reports. The Dow slumped 295 points lower with the Nasdaq off 103.

LIVE CATTLE:

Live futures settled 5 to 52 higher, supported late by adverse winter weather, cash premiums and short-covering. This market spent a good deal of the morning in red ink, pressured by outside market and uncertain cash potential. Beef cut-outs closed sharply higher on moderate to fairly good demand and light to moderate offerings (Choice, $222.47, up $1.95; Select $217.63, up $1.97) Box volume included 65 loads of choice cuts, 31 loads of select cuts, 17 loads of trimmings, and 16 loads of coarse grinds.

WEDNESDAY'S CASH CATTLE CALL:

Steady to $2 higher. Cash trading potential will remain limited at midweek as feedlots work to dig out from the major winter storm. Trade volume will probably be delayed until Friday.

FEEDER CATTLE:

Feeder contracts closed 7 to 32 higher, supported late by short-covering and the premium status of the cash index. Some specs wanted to talk profits following the post cattle inventory fall-out. CME cash feeder index $160.28, off $0.30.

LEAN HOGS:

Lean hog futures sold off late in the session, closing as much as 70 to 160 lower in the first five contracts. The fact that deferred issues fared much better suggests that part of the action was tied to bull-spreaders taking profits. The carcass value surged significantly higher, powered by stronger demand for all primal except the belly. Pork cut-out: $78.37 (FOB Plant) up $1.92. CME cash lean 12/29: $61.87, up $0.80 (DTN Projected lean index for 02/01: $62.51, up $0.64).

WEDNESDAY'S CASH HOG CALL:

Steady to $1 higher. Look for hog buyers to reestablish country receipts in the morning with generally stronger bids.

For more from John, see www.feelofthemarket.com

(CZ)

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