Wednesday Closing Livestock Market Summary - Cattle Futures Slam Higher With Triple-Digit Gains

GENERAL COMMENTS

Feedlot country saw a few more bids Wednesday (e.g., $118 live; $188-$190 dressed), but nothing exciting enough to draw the least bit of selling interest. According to the closing report, the national hog base is $0.07 lower ($62-$71.50, weighted average $69.64). Nearby corn futures jumped 4 cents higher, the biggest one-day pop since mid-November. Trade sources credited commercial buying and a general lack of selling interest. The stock market roared back to life following Tuesday's set-back with the Dow closing 322 points higher (over 26,000 ever) and the Nasdaq settling up 74.

LIVE CATTLE

Ignoring softer wholesale beef business, live contracts rocketed to near-two-week highs. Supported by aggressive short-covering, technical-buying and cash optimism, prices here erupted by 152 to 287 points. Spot February closed right at its 40-day moving average and 100-day moving average. If we could somehow manage to gap above this nexus in the morning, the high of Jan. 4 ($123.62) could be quickly challenged. April and June nosed above 40-day moving averages on the close. Beef cut-outs: lower, off $0.28 on both choice and select (choice: $205.30; select: $199.61) with light-to-moderate demand and offerings (71 loads of choice cuts, 29 loads of select cuts, 10 loads of trimmings, 16 loads of ground beef).

THURSDAY'S CASH CATTLE CALL:

Steady to $2 higher. In the wake of the strong midweek rally, feedlot managers should display even greater resolve in terms of higher asking prices (e.g., $122-$123 in the South; $195-$197 in the North). Such bullish psychology could easily delay the development of significant trade volume until Friday.

FEEDER CATTLE:

Following the bullish lead of the live trade, feeders pushed prices sharply. Final gains ranged from 172 to 240. For the first time in months, the spot contract has nearly $3 over the cash index. January and March close above 40-day moving averages. CME cash feeder index: 01/16: $145.01, off 37.

LEAN HOGS:

Lean futures closed mostly lower with the front end getting hit worse than nearbys. Wednesday's round of weakness seemed little more than profit-taking. Certainly nothing happened of technical significance. The carcass value closed modestly higher with strength in ribs, butts and picnics overshadowing weakness in bellies and loins. Pork cut-out: $80.95, up $0.24. CME cash lean index for 01/15: $71.92, up $0.77 (DTN Projected lean index for 01/16: $71.99, up $0.07).

THURSDAY'S CASH HOG CALL:

Steady. Forces of supply and demand seem to be roughly balanced at midmonth. Look for opening bids in the morning to be about steady.