DTN Closing Livestock Comments

GENERAL COMMENTS:

Activity in feedlot country was limited to the distribution of new showlists. The offering appears to be generally larger, especially in the South. Asking prices were poorly defined. According to the closing report, the Iowa hog base is .73 higher compared with the Prior Day settlement ($47.00-$52.75, weighted average $52.28). The corn market closed generally a nickel higher thanks to commercial buying and technical support. U.S. stocks closed lower as investors focused on retail results and readied for key data and central bank comments later in the week. The Dow closed 78 points lower with the Nasdaq off 18.

LIVE CATTLE:

Live contracts broke lower during the last trading day of November. Contracts settled 82 to 177 lower, pressured by the country's stubborn cash discounting. With delivery potential just around the corner (i.e., first notice is on the seventh), commercials are looking for ways to anticipate the narrowing of the basis. Beef cut-outs: mixed, up $1.25 (choice, $205.65) to off .64 (select, $194.86) with light to moderate demand and offerings (46 loads of choice cuts, 15 loads of select cuts, 11 loads of trimmings, 26 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL:

Steady to $2 higher. The cash market should remain poorly defined Tuesday, though short-bought packers may need to make something happen in the country as early as Wednesday or Thursday.

FEEDER CATTLE:

Feeders also stumbled back from the holiday, but fell twice as hard as their live counterparts. Contracts settled 275 to 327 lower as commercial feedlot demanded better margin opportunities. On an estimated run of no more than 2,951 head (limited by the weekend's strong winter storm), Oklahoma City sold yearlings and calves with a lower undertone. CME cash feeder index: 11/27: 173.80, up 1.64.

LEAN HOGS:

Lean hog issues closed on a mixed basis, up 100 to off 87. Nearbys generally lost ground to deferred thanks to bear-spreading or bull spreaders taking profits. The discount of the cash index may have also encouraged some profit-taking in December and February. The carcass value surged higher with all primals advancing except the butt. Pork cut-out: $73.00, up $1.50. CME cash lean 11/25: 55.74, up .10 (DTN Projected lean index for 11/27: 55.62, off .12).

TUESDAY'S CASH HOG CALL:

Steady to $1 higher. Look for the cash trade to open with steady/firm bids in the morning tied to signs of improving fundamentals.

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

(AG)

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