Tuesday Closing Livestock Market Summary - Livestock Futures Launch Week With Solid Price Progress

GENERAL COMMENTS

Feedlot country didn't make much noise Wednesday with both sides looking toward the board for short-term direction. A few bids of $118 were reported in parts of the North. Some asking prices were suggested around $122-$123 in the South and $195-plus in the North. According to the closing report, the national hog base is $0.10 higher ($62-$71.50, weighted average $69.93). Corn futures closed several cents higher despite the ongoing dearth of bullish news. The stock market suffered a big reversal, breaking from early session highs to close lower. The Dow settled off 10 points, more than 280 below the highs of the day. The Nasdaq finished 37 points in the red.

LIVE CATTLE

Live contracts finished moderately higher with most contracts bouncing 25 to 92 points. While somewhat more promising of greater stability, there were not many technical awards to be passed out at close of trade. Most contracts managed to close above eight-day moving average lows, but that's about it in terms of real encouragement. Beef cut-outs: sharply lower, off $2.15 (select: $199.89) to $2.45 (choice: $205.58) with light-to-moderate demand and moderate-to-heavy offerings (90 loads of choice cuts, 26 loads of select cuts, 12 loads of trimmings, 19 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL:

Steady. While a few more packer bids may find their way to the table, we suspect significant trade volume will be delayed until Thursday or Friday.

FEEDER CATTLE:

Feeder contracts closed 72 to 127 higher, boosted both by short-covering and the technical correction of oversold charts. Nevertheless, multiple levels of tough overhead resistance remain in place. CME cash feeder index: 01/15: $145.38, off 46.

LEAN HOGS:

Lean hog futures scored triple-digit gains Wednesday (i.e., up mostly 110 to 232 higher), supported by aggressive short-covering and technical buying. Given Wednesday's impressive rally, it's tough not to dismiss last week's pull-back as just a temporary correction. July and August settled back above 10-day moving average highs. October set a new contract high. Carcass value closed moderately lower with softer demand for butts and picnics overshadowing stronger loins and bellies. Pork cut-out: $78.42, off $0.65. CME cash lean index for 01/12: $71.15, up $1.35 (DTN Projected lean index for 01/15: $71.92, up $0.77).

WEDNESDAY'S CASH HOG CALL:

Steady to $1 higher. Hog buyers should resume procurement chores at midweek with steady/firm bids.