DTN Closing Livestock Comments

GENERAL COMMENTS:

From Friday to Friday livestock futures scored the following Changes: Oct LC, Up $7.70; Dec LC, Up $5.95; Oct FC, Up $9.47; Nov FC, Up $10.35, Oct LH, Up $0.47 Dec LH, Up $0.75. At long last, cash cattle traders managed to pull out of a month-long nosedive. Light to moderate sales were reported in most areas with live business mostly $9 to $10 higher (i.e. $126 to $127). Dressed business in the North ranged from $195 to $197, generally $8 to $10 higher than last week's weighted average basis Nebraska. According to the closing report, the Iowa hog base is $0.39 lower compared with the Prior Day settlement ($67.00-$73.00, weighted average $71.72). Corn futures closed down 8 1/2 cents in the December and down 7 3/4 cents in the July.

LIVE CATTLE:

After a choppy trading session, live contracts closed mostly higher with only October and December settling somewhat lower. The choppiness was related to late-week profit-taking and cash uncertainty. But once it became clear that feedlot sales would be significantly higher by the end of the day, live contracts rallied more than 100 points from session lows. Charts now look encouraging regarding the likelihood of a reliable market bottom. Beef cut-outs: mixed, down $0.61 (choice, $203.00) to up $0.43 (select, $197.89) with light to moderate demand and offerings (68 loads of choice cuts, 48 loads of select cuts, 21 loads of trimmings, 36 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady to $2 higher. Monday's business will be limited to the distribution of new showlists. Given the success of this week's turnaround, the new offering is likely to be priced around $130 to $132 on a live basis.

FEEDER CATTLE:

Feeder cattle closed with solid progress, supported late by follow-through buying and technical encouragement. The sell-off in corn futures also proved to be supportive. CME cash feeder index: 10/08: $184.29, up $0.86.

LEAN HOGS:

Lean hogs closed modestly lower, completing a week of decent chart progress. Today's action was rather lackluster with pre-weekend profit-taking the primary feature. Carcass value fell back modestly from Thursday's surge on weakness in all cuts except picnics and bellies. Pork cut-out: $88.58, down $0.24. CME cash lean 10/07: $74.75, up $0.46 (DTN Projected lean index for 10/08: $74.84, up $0.09).

MONDAY'S CASH HOG CALL:

Steady. Cash hog buyers should start the new week with basically steady bids. While processor margins remain attractive, market hog numbers should steadily increase over the next 30 to 60 days.

John A. Harrington can be reached at john.harrington@dtn.com

(CZ)

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