DTN Closing Livestock Comments

GENERAL COMMENTS:

Feedlot country is at a standstill Wednesday afternoon. Some bids reported in Kansas at $118. According to the closing report, the Iowa hog base is .88 higher compared with the Prior Day settlement ($63.00-$73.50, weighted average $72.09). Corn futures closed down 2 1/2 in the December contract and down 2 1/4 cents in the July.

LIVE CATTLE:

October live cattle futures surged higher once again, settling at $129.35 per cwt after a $4.22 per cwt gain. The rest of the complex backed away from session highs, but still was able to hold triple-digit gains into the close -- up $1.70 to $3 per cwt. Traders are expecting additional follow-through buyer interest will step back in as markets were recently oversold. This will likely create additional momentum later in the week. Beef cut-outs: lower, down 0.59 (choice, $203.58) to down 1.17 (select, $197.70) with moderate demand and heavy offerings (114 loads of choice cuts, 73 loads of select cuts, 30 loads of trimmings, 64 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

Steady. Cash activity remains sluggish with just a few bids developing in Kansas at $118 per cwt during the day. The firmer tone in futures trade over the last couple of weeks is putting a sense of resolve into feeders who are likely to focus on steady money compared to last week. Active trade is likely to be pushed until late in the week, although more focused bids should start developing sometime Thursday.

FEEDER CATTLE:

Feeder cattle futures backed away from session highs at the close. Traders focused on aggressive moves in nearby live cattle futures and the potential that Tuesday's surge higher helped to bring some additional underlying buyer support out of the woodwork and back into nearby and deferred contracts. CME cash feeder index: 10/06: 182.27, off 0.02.

LEAN HOGS:

Lean hog futures slipped lower through the trading session as the focus on cattle futures seemed to slowly drain any momentum out of hog trade. October futures closed higher, although just barely with a slim 22 cent per cwt gain. Other nearby contracts posted as much as $1 per cwt lower as traders shifted attention to the cattle complex. Carcass value fell back slightly again weakness all primals except loins and ribs. Pork cut-out: $86.93, down $0.10. CME cash lean 10/05: 73.75, up .37 (DTN Projected lean index for 10/06: 74.29, up .54).

THURSDAY'S CASH HOG CALL:

Steady to 50 cents lower. Initial bids are expected to once again be mostly steady Thursday morning as packers start to work on not only gaining access to hogs for the aggressive end-of-the-week schedule, but also on securing about 116,000 head for Saturday. The shift of attention to cattle markets over the last couple of days in futures trade may bring less focus on cash hog prices through the end of the week also.

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

(CZ)

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