Thursday Closing Livestock Market Summary - Cattle Futures Suffer Ugly Reversal

GENERAL COMMENTS

Feedlot country remained dead quiet with sellers easily ignoring packer bids sharply below asking prices. For example, starter bids in the South were no more attractive than $122, approximately $5 below asking prices. According to the closing report, the national hog base is $0.35 lower ($63-$71, weighted average $69.55). Corn futures finished a penny plus lower on light profit-taking. The stock market closed mixed with the Dow up 100 points and the Nasdaq off 3.

LIVE CATTLE

Bullish momentum was the rule of the day for most of the session with nearbys setting more multi-months highs. But such confidence really came unglued late in the day when aggressive long liquidation and profit-taking caused prices to abruptly reverse and close sharply lower. Final settled ranged from 92 to 295 lower. Beef cut-outs: mixed, up $0.47 (select: $201.32) to off $1.22 (choice: $206.77) with light-to-moderate demand and offerings (78 loads of choice cuts, 27 loads of select cuts, 11 loads of trimmings, a half load of ground beef).

FRIDAY'S CASH CATTLE CALL:

Steady to $2 higher. Cash traders seem to be set for another eleventh hour of business. Indeed, given the wide spread between bids and asking prices, significant trade volume may not surface until after the release of the Jan. 1 on-feed report at 2 p.m. (CST).

FEEDER CATTLE:

With the exception of spot January (supported somewhat by the cash index), feeder futures sank 165 to 255 lower. The sell-off here was obviously tied to the late crash in live futures. Thursday's pull-back reinforced overhead resistance near March's 100-day moving average at $147.81. CME cash feeder index: 01/24: $147.68, off $0.35.

LEAN HOGS:

Lean issues closed 45 to 145 points lower, tripped by long liquidation, technical-selling and spillover bearishness from the cattle complex. April and June closed below 40-day moving averages for the first time since late December. The carcass value closed modestly higher with better demand for loins and bellies overshadowing weakness in butts, picnics, ribs and hams. Pork cut-out: $80.67, off $0.28. CME cash lean index for 01/23: $73.80, up $0.41 (DTN Projected lean index for 01/24: $73.77, off $0.03).

FRIDAY'S CASH HOG CALL:

Steady. Given relatively modest Saturday kill plans, late-week cash bids are unlikely to be any better than steady.