Monday Closing Livestock Market Update - Live Cattle Futures Open Week With Significant Advance

GENERAL COMMENTS

Activity in cattle feeding country was limited to the distribution of showlists. Ready numbers look smaller in all states except Texas. According to the closing report, the national hog base is $0.44 higher ($62-$70, weighted average $69.87). Corn futures closed mostly flat with fractional softness noted on the front end. Equities closed higher, somewhat supported by the end of the government shutdown. The Dow settled 142 points higher with the Nasdaq positive by 71.

LIVE CATTLE

Inspired by greater packer spending late last week, live issue opened the week with significant gains (i.e., up 65 to 165). Chasing cash premiums, spot February gapped higher and eventually landed the highest close reported since late November. Feb will start out on Tuesday 66 points above last week's 5-area steer average ($122.89). Beef cut-outs: mixed, up $0.21 (choice, $205.07) to off $0.64 (select, $199.52) with light-to-moderate demand and moderate offerings (56 loads of choice cuts, 21 loads of select cuts, 20 loads of trimmings, 12 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL:

Steady to $2 higher. Country activity on Tuesday should be typically quiet with both bids and asking prices poorly defined.

FEEDER CATTLE:

With the exception of a slight loss in spot January (i.e., off 5), feeder contracts closed moderately higher, up 22 to 57. On total receipts of 12,264 head (up from 9,750 last week and 8,292 in 2017), Oklahoma city sold feeder steers weighing 600-850 lbs. steady to $3 lower, 850-1,000 pounds. Feeder heifers were marked mostly steady to $3 higher on a limited test. CME cash feeder index for 01/19: NA.

LEAN HOGS:

Lean hog issues closed moderately lower, off 22 to 37. The short-term market trend remains in neutral while the structure of the futures market is positive and the overall market structure is positive as well. Carcass value closed higher, powered mainly by a $5.43 push in the belly primal. Pork cut-out: $82.17, up $0.73. CME cash lean index for 01/18: $73.67, up $0.12 (DTN Projected lean index for 01/19: $73.40, off $0.27).

TUESDAY'S CASH HOG CALL:

Steady to $1 higher. Look for hog buyers to resume procurement chores in the morning with steady/firm bids.