Thursday Closing Livestock Market Summary - Cattle Futures Break Hard Thanks to Long Liquidation, Profit-Taking

GENERAL COMMENTS

Light-to-moderate trade volume surfaced in parts of the Northern tier of cattle feeding country with most dressed sales marked at $192, nearly $10 higher than last week's weighted average basis Nebraska. The South remained untested with feedlot managers rejecting bids as high as $120 live. According to the closing report, the national hog base is $0.69 lower ($57.50-$63.75, weighted average $63.17). The corn market settled generally 2 cents higher, supported by light commercial buying and pockets of harvest delay. The stock market closed mostly higher with the Dow market another new record (i.e., 23,516, up 81 points). The Nasdaq finished 1 point lower.

LIVE CATTLE

Live futures closed mostly 17 to 227 lower with nearby December and February catching the most selling heat. Besides the need for some long specs to take money off the table, bullish enthusiasm was probably checked Thursday by cash uncertainty. Can feedlot country really score as big a cash advance as it did last week? Beef cut-outs: mixed, up $0.86 (choice: $208.25) to off $0.55 (select: $193.16) with light-to-moderate demand and moderate-to-heavy offerings (84 loads of choice cuts, 45 loads of select cuts, 14 loads of trimmings, 19 loads of ground beef).

FRIDAY'S CASH CATTLE CALL:

Significantly higher in the South. Northern business should be steady/firm with Thursday's big jump forward. Southern buyers will have to raise bids of $120 seen Thursday (i.e., $3 higher than last week's trade) in order to collect necessary numbers.

FEEDER CATTLE:

Feeders closed with triple-digit losses, off 115 to 242. This market may have been simply too hot not to cool off. This single round of aggressive profit-taking did little to damage the technical picture, CME cash feeder index: 11/01: $158.71, up $1.37.

LEAN HOGS:

Lean contracts closed with mixed price action, up 40 to off 80. December and February lost ground to deferreds in part because of bull-spreaders taking profits. Though forward momentum clearly eased Thursday, April through July still set new contract highs for the fourth consecutive session. Carcass value jumped significantly higher Thursday with the help of stronger, belly, rib and picnic demand. Pork cut-out: $79.40, up $1.37. CME cash lean index for 10/31: $69.30, up $0.22 (DTN Projected lean index for 11/01: $69.42, up $0.12).

FRIDAY'S CASH HOG CALL:

Steady to $1 lower. Look for the late-week cash market to open in the morning with steady/weak bids.