GENERAL COMMENTS
Moderate cattle trading surfaced in most areas
of feedlot country with $120 live paid in the South ($0.50 higher than
last week's weighted averages) and $190-$191 dressed the North ($1-$2
higher). According to the closing report, the national hog base is $0.27
higher ($49-$57.20, weighted average $55.90). Corn futures settled
generally 2 cents higher, modestly girded by light short-covering tied
to noncommercials. The stock market closed lower with the Dow off 28
points and the Nasdaq down 2.
LIVE CATTLE
Live futures imploded at midweek despite reports
of firm/higher cash sales. At the close, prices settled 60 to 180 in
the red with spot December logically holding up better than deferreds.
Blame a combination of long liquidation, light volume, a fear of a large
November placement total to be confirmed on Friday. It's always tough
to judge the technical significance of late-year trading, and that jury
may be out for some time. Beef cut-outs: widely mixed, up $1.17 (select:
$203.15) to off $3.67 (choice: $198.09) with light to moderate demand
and moderate to heavy offerings (55 loads of choice cuts, 36 loads of
select cuts, 9 loads of trimmings, 10 loads of ground beef).
THURSDAY'S CASH CATTLE CALL:
Steady with midweek. We'll want to check trade
volume totals in the morning, but there's a good chance that business is
done for the week.
FEEDER CATTLE:
Feeder-fat spreads continued to improve
Wednesday as feeder contracts fell twice as fast as their live
counterparts. Feeder issues settled 117 to 342 points lower. Strangely,
spot Jan closed more than $10 below the cash index. CME cash feeder
index: 12/15: $152.47, off $0.03.
LEAN HOGS:
If live cattle traders ran scared from pending
USDA inventory news, lean hog traders seemed to say "Bring it on." Hog
futures closed sharply higher, up 67 to 147. Perhaps aggressive
short-covering was sparked by the cash trade's recent stability and
suggestions that previous expansion has been somewhat overstates. The
carcass value closed higher, supported mostly by better demand for
bellies and hams. Pork cut-out: $76.51, up $0.24. CME cash lean index
for 12/18: $62.71, off $0.47 (DTN Projected lean index for 12/19:
$62.38, off $0.33).
THURSDAY'S CASH HOG CALL:
Steady. Look for hog buyers to open trade in the morning with near-steady bids.
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