DTN Closing Livestock Comments

GENERAL COMMENTS:

Light-to-moderate trading was reported in parts of Colorado Friday with fed steers and heifers marked at $130.00, generally $2.00 lower than last week. But, for the most part, country activity was very quiet in the wake of Thursday's activity. The Iowa hog base closed $0.02 lower compared with the Prior Day settlement ($52.00-$65.00, weighted average $63.30). From Friday to Friday livestock futures scored the following changes: Feb LC, off $6.10; Apr LC, off $5.28; Mar FC, off $3.80; May FC, off $4.23, Feb LH, up $1.15 Apr LH, up $0.07. Corn futures closed about a penny lower in very light trade volume. Selling was tied to slow exports and decent prospects for South American production. The stock market finally bounced higher right before the weekend, supported by sharply higher oil prices and oversold conditions. The Dow closed 313 points higher with the Nasdaq better by 70.

LIVE CATTLE:

Futures closed off 17-70. This proved to be a disappointing finish given the early promise of higher action based upon short-covering and oversold indicators. Unfortunately, late-week buying energy could not be sustained with spot February settling 164 points below its session high. In fact, February closed below psychological support at 130 for the first time since Jan. 20. Beef cut-outs: lower (Choice, $216.08 -$0.94, Select $212.53 -$1.74) light-to-moderate demand and offerings (59 loads of choice cuts, 24 loads of select cuts, 05 loads of trimmings, 18 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady. Monday's activity will be limited to the distribution of new showlists. Our guess is that feedlots will start out pricing cattle around 136.00 in the South and 210.00 in the North.

FEEDER CATTLE:

Futures closed off 22-65. As in the live market, feeders started the trading day in better form than they ended it. Feeder issues reversed early gains around mid-session with nearby contracts settling nearly 200 points below session highs. Needless to say, commercial buying continues to be discouraged by feedlot red ink and the deep discounts of deferred live issues. CME cash feeder index: 02/11: $157.60, off $1.19.

LEAN HOGS:

Futures closed mixed up 92 to off 20. Nearby contracts gained on the far deferreds, supported by positive fundamentals and bull-spreading interest. Note that spot February expired Friday at 65.95, near par with the cash index. Impressively, new spot April advanced by 92 points and seems unafraid to take the lead Monday nearly $5.00 above the cash index. Pork cut-out: $76.08 (FOB Plant) up $0.56. CME cash lean 02/10: $65.60, up $0.31 (DTN Projected lean index for 02/11: $65.91, up $0.31).

MONDAY'S CASH HOG CALL:

Steady to $1.00 higher. Although lean hog futures will be closed on Monday due to the Presidents Day Holiday, hog buyers will be working to secure adequate slaughter needs. That probably means another round of firm bids given how market numbers continue to tighten.

For more from John, see www.feelofthemarket.com

(CZ)

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