DTN Closing Livestock Comments

GENERAL COMMENTS:

Real issues of cash cattle trading have not yet made it to the table this week, and they may not be seriously considered until sometime Friday. Most feedlots in the central Plains and Western Corn Belt were too preoccupied digging out from the early week blizzards to even consider bids or asking prices. A few steers and heifers in parts of the South were priced around $142. According to the closing report, the Iowa hog base is NA compared with the Prior Day settlement. Corn futures settled a penny plus lower, checked by signs of softening ethanol demand. U.S. stocks closed mostly higher as the Dow and S&P staged a massive comeback spurred by a surge in oil. The Dow closed 183 points higher with the Nasdaq down by 12.

LIVE CATTLE:

Live contracts made good use of midweek by closing mostly 20 to 112 points higher. Nearbys February and April led the way with triple-digit gains, boosted by bull-spreading interest, the negative impact of wintry conditions on production potential, and the reality of cash premiums. Closing at $136.85, spot Feb landed its best finish since Nov. 4. Note that first notice day for spot Feb dawns on Monday. Beef cut-outs: higher, up $0.10 (choice, $222.57) to $0.39 (select, $218.02) with light to moderate demand and offerings (61 loads of choice cuts, 42 loads of select cuts, 4 loads of trimmings, 28 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

Steady to $2 higher. We could start to see a few bids in feedlot country Thursday, but many weather-beaten feedlot managers will be reluctant to price cattle before Friday.

FEEDER CATTLE:

The feeder market also settled higher, yet lagged behind the impressive pace of front-end live futures. Feeder contracts closed no better than moderately higher, up 7 to 40. CME cash feeder index: 02/02: $160.14, off $0.14.

LEAN HOGS:

Lean hog issues finished 35 to 72 points higher, supported by positive fundamentals and short covering. Spot February, which expires a week from Friday, ended the session 35 points higher at $64.55, a 125-point premium over the latest cash index. The carcass value quickly surrendered much of Tuesday's advance, pressured by lower quotes on all primals except the butt. Pork cut-out: $77.12, off $1.14. CME cash lean 02/01: $62.51, up $0.64 (DTN Projected lean index for 02/02: $63.30, up $0.79).

THURSDAY'S CASH HOG CALL:

Steady to $1 higher. Look for hog buyers to resume work in the morning with steady/firm bids. Saturday kill plans could be as larger as 250,000 or better as processors move to make up for early week storm delays.

For more from John, see www.feelofthemarket.com

(CZ)

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