Thursday Closing Livestock Market Summary - Cattle Traders Extend Week's Rally With Another Round of Solid Gains

GENERAL COMMENTS

The cash cattle arena remained dead quiet through the day with bids and asking prices separated by as much as $5 on a live basis (e.g., $118 versus $123 in Kansas and Texas). According to the closing report, the national hog base is $0.31 lower ($62-$70.50, weighted average $69.39). The corn market closed a penny plus lower in light and featureless trade volume. Sobered by the threat of a government shutdown, the stock market closed lower with the Dow off 92 points and the Nasdaq down by 2.

LIVE CATTLE

Bulls successfully tapped momentum Thursday as well as technical green lights. Prices settled mostly 42 to 107 higher. While several live contracts merely kissed overhead resistance on Wednesday's close, virtually all months settled well over 100-day moving averages. Having said that, further progress here is likely to hinge on the exact level of packer spending in feedlot country Friday. Beef cut-outs: higher, up $0.39 (choice: $205.69) to $1.26 (select: $200.87 with light-to-moderate demand and moderate-to-heavy offerings (96 loads of choice cuts, 38 loads of select cuts, 4 loads of trimmings, 14 loads of ground beef).

FRIDAY'S CASH CATTLE CALL:

Steady to $2 higher. It's now-or-never time as short-bought packers roll into the eleventh hour still working to cover late-January slaughter needs. Significant trade volume should surface Friday sometime between late morning and midafternoon.

FEEDER CATTLE:

Encouraged by signs of bottoming live futures, specs and commercial buyers chased feeder issues 12 to 130 higher (note spot January through May landed triple-digit gains). Both January and March closed right below 100-day moving averages. CME cash feeder index: 01/17: $146.47, up $1.46.

LEAN HOGS:

Lean futures finished the trading day on a mixed basis with settlement ranging from 37 higher to 42 lower. Generally speaking, nearbys gained on deferreds. Spot February seems to be betting that the cash rally is nearly out of gas. Stay tuned. The carcass value closed lower, somewhat pressured by weaker demand for butts and ribs. Pork cut-out: $80.67, off $0.28. CME cash lean index for 01/16: $72.99, up $1.07 (DTN Projected lean index for 01/17: $73.55, up $0.56).

FRIDAY'S CASH HOG CALL:

Steady. Expect hog buyers to open with near steady bids in the morning. Most plants appear to have late-week needs pretty much in hand.