DTN Closing Livestock Comments

GENERAL COMMENTS:

Apparently, cattle buyers (or their white-shirted bosses) have decided to momentarily adjourn for turkey on Thursday and the return to work on Friday in search of short-term slaughter needs. Maybe there's still some time to shop late Wednesday afternoon, but it's beginning to look as if most have gone home. We saw nothing more than a few $195 dressed bids in the North Wednesday, well below asking prices of $131-plus in the South and $200-plus in the North. If packers do resurface on Friday, it will be interesting to see how they are received by feedlot managers, especially if weather conditions turn wintry. According to the closing report, the Iowa hog base is $0.01 lower compared with the Prior Day settlement ($50.00-$52.75, weighted average $51.89). Corn futures settled generally 2-3 cents higher, supported by bean buying and record ethanol production. U.S. stocks closed narrowly mixed in the last full trading day of the holiday week. The Dow closed 1 point higher with the Nasdaq better by 13.

LIVE CATTLE:

Live issues closed moderately higher, up 45 to 85. Short-covering prior to the holiday recess seemed to be the primary market feature. Predictably, trade volume was quite light. Beef cut-outs: higher, up $0.28 (choice, $204.09) to $1.52 (select, $193.76) with light-to-moderate demand and offerings (100 loads of choice cuts, 30 loads of select cuts, 17 loads of trimmings, 40 loads of coarse grinds).

FRIDAY'S CASH CATTLE CALL:

Steady to $2 higher. We think short-bought packers will be forced to interrupt the holiday weekend at least long enough to collect enough ready cattle to cover (or at least start) the full production week following Thanksgiving.

FEEDER CATTLE:

Feeders followed the general path cut by live futures, albeit trailing at a slower pace. Most contracts settled 10 to 50 points higher. CME cash feeder index: 11/24: $172.69, up $0.86.

LEAN HOGS:

For the most part, lean hog futures closed higher thanks to bull-spreading and technical buying. Spot Dec settled at its highest point since late October. The late-year chart looks very promising in terms of a bottom, anticipating both tighter live supplies and better product demand through the last 30 days of 2015. Carcass value fell hard right before meat traders left for the holiday. All primals except the belly lost ground gained on Tuesday. Pork cut-out: $71.72, off $1.90. CME cash lean 11/23: $55.50, up $0.13 (DTN Projected lean index for 11/24: $55.64, up $0.14).

FRIDAY'S CASH HOG CALL:

Steady. Hog buyers should put in a short day on Friday, but we expect them to at least work the early rounds with basically steady bids.

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

(AG)

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