DTN Closing Livestock Comments

Cattle Futures Launch Short Week With Solid Gains

(DTN file photo)

GENERAL COMMENTS:

Feedlot country experienced a typically quiet Monday with packer efforts limited to the collection of new showliusts. The fed offering appears to be mixed, slightly larger in Nebraska, Colorado, and Kansas, but smaller in Texas. According to the closing report, the Iowa hog base is 0.16 lower compared with the Prior Day settlement ($49.00-$52.25, weighted average $51.91). Corn futures settled 3-4 cents higher, support by short covering and commercial buying. Equities closed mildly lower tied to fluctuations in oil prices and economic reports waiting in the wings. The Dow closed 31 points lower with the Nasdaq down 2.

LIVE CATTLE:

Live contracts rolled higher to the tune of triple digits (i.e., closing up 65 to 247), supported by pre-holiday short covering and suggestions that beef demand would soon improve as retailers and food managers shifted focus aware from turkey. Spot December jumped back over 132, topping its 10-day moving average high for the first time since Oct. 28. Beef cut-outs: mixed, up 0.10 (select, $191.05) to off 0.35 (choice, $202.79) with light-to-moderate demand and moderate offerings (69 loads of choice cuts, 34 loads of select cuts, 4 loads of trimmings, 49 loads of coarse grinds).

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TUESDAY'S CASH CATTLE CALL:

Steady to $2 lower. Given the holiday-shorted schedule, cattle buying interest could start to surface as early as Tuesday. Yet significant trade volume will probably not surface until midweek.

FEEDER CATTLE:

Feeders followed the bullish lead of their live counterparts, closing 75 to 175 higher. The January chart seems to be consolidating between 160 and 165. On an estimated run of 4,600 head (down from 7,371 last week and 5,941 in 2014), Oklahoma City sold feeder steers and heifers $2-$4 higher. Steer calves were marked $6-$8 higher with their heifer mates $10-$20 higher. CME cash feeder index: 11/20: $171.51, off $2.88.

LEAN HOGS:

Action in the lean hog market was more of a yawner with final settlements not that far from unchanged (i.e., up 32 to off 37). Though far from conclusive, bottom-building seems cautiously constructive. The carcass value closed under pressure with all primals losing ground except the ham. Pork cut-out: $72.30, off $0.84. CME cash lean 11/19: $55.52, off $0.35 (DTN Projected lean index for 11/20: $55.37, off $0.15).

TUESDAY'S CASH HOG CALL:

Steady to $1 lower. Look for hog buyers to resume work in the morning with steady/weak bids. Some believe most plants already have their short holiday slaughter schedule essentially covered.

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

(AG)

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