AFTERNOON MARKET UPDATE; Jan 2
MORNING LIVESTOCK COMMENTS
John Harrignton, DTN Livestock Analyst
GENERAL COMMENTS: From Friday to Friday livestock futures scored the following changes: Feb LC, Up 3.20, Apr LC, Up 3.10; Jan FC, Up 10.23; Mar FC, Up 9.55; Feb LH, Off .30: Apr LH, Off .70. The cash cattle trade was generally slow with just a few clean-up deals evident in the North. Most live sales for the week were $4 to $5 higher than last week. According to the closing report, the Iowa hog base closed .10 lower compared with the Prior Day settlement ($70.50-$78.00, weighted average $75.77). Corn futures closed lower, down 1 1/4 in the March through July contracts.
LIVE CATTLE: Futures closed higher, up 152 to 250. Live cattle futures gapped sharply higher on the opening and never looked back. Aggressive buying was linked to greater packer spending on Wednesday as well as technical bullishness. While spot February and April closed just below their 40-day moving averages, June through December closed above 40-day moving averages for the first time in months. Beef cut-outs: mixed (choice, $247.83, down $1.07; select, $239.32, up 0.75) with light to moderate demand and offerings (65 loads of choice cuts, 18 loads of select, 4 loads of trimmings, 18 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady to $2 higher. Monday will be typically slow as packers limit activity to the collection of new showlists. Inspired by higher country sales and new bullishness on the board, feedlot managers will probably price new showlists $2 to $4 higher (e.g. $168 to $170 in the South).
FEEDER CATTLE: Futures closed higher, up 375 to 450. Feeder cattle exploded higher along with their live counterparts. Spot January took full advantage of the new trading limit of 450 points. Apparently traders are expecting the cash index to catch fire next week. As of tonight's close, January is holding nearly a $6 premium to the cash index. 12/31 cash index: 217.95, up .31.