Tuesday Closing Livestock Market Summary - Meat Futures Ignore Bearish Supply Move With Post-Christmas Rally

GENERAL COMMENTS

Given the holiday-delayed start to the trading week, Tuesday in cattle country was as good as Monday with activity limited to the distribution of new showlists. Ready numbers appear to be generally smaller than last week with only Nebraska offering a few more steers and heifers. According to the closing report, the national hog base is $0.07 higher ($50-$58, weighted average $56.59). Corn futures closed fractionally higher, perhaps firmed a bit from buying in the beans. Yet late-year corn continues to have no direction to speak of. The stock market closed lower with the Dow off 2 points and the Nasdaq down by 23.

LIVE CATTLE

Live contracts closed sharply higher, up 120 to 290 points. Friday's bearish placement number was tossed in the backseat as bulls jumped behind the wheel and stomped on the gas thanks to bitter cold temperatures across much of feeding country and aggressive short-covering. If winter is set to be this harsh, production potential could really be curtailed. Beef cut-outs: sharply higher, up $2.95 (select: $190.83) to $3.04 (choice: $202.60) with moderate to good demand and light to moderate offerings (41 loads of choice cuts, 19 loads of select cuts, 11 loads of trimmings, 16 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL:

Steady to $2 higher. Although we could start to see a few starter bids at midweek, significant trade volume will probably be delayed until Thursday or Friday.

FEEDER CATTLE:

Following the lead of live contracts, feeders surged 200 to 280 higher. Yet even with Tuesday's pop, feeder charts can't claim much encouragement. Spot March managed to nose above its 8-day moving low on the close, a modest accomplishment if there ever was one. In short, short- and long-term trends here remain quite negative. CME cash feeder index: 12/25: $148.72, off $0.64.

LEAN HOGS:

Nearby contracts scored solid progress with Feb and April settling at the highest marks seen since Dec. 4. It was only several weeks ago that many chart-watching bears expressed confidence that a double top was in place for most 2018 contracts. Suddenly, the tables have turned with talk of double bottoms. The carcass value closed moderately lower, checked by softer demand for loins, bellies and hams. Pork cut-out: $77.23, off $0.02. CME cash lean index for 12/21: $61.76, off $0.24 (DTN Projected lean index for 12/22: $61.62, off $0.14).

WEDNESDAY'S CASH HOG CALL:

Steady. Hog buyers are likely to open with near-steady bids in the morning with late-year supply and demand in pretty good balance.