Thursday Closing Livestock Market Summary - Cattle Bulls Wake From Early Week Slumber and Roar Higher

GENERAL COMMENTS

The cash cattle trade was generally slow with just a few clean-up deals reported in parts of the North (i.e., $126/$200). Asking prices for unsold steers and heifers clearly firmed through the day in light of the board's bullish performance. According to the closing report, the national hog base is $1.26 higher ($64-$73.55, weighted average $71.82). Corn futures closed fractionally higher as more positive export biz helped traders ignore selling pressure in the bean market. The stock market closed mixed with the Dow up 37 points and the Nasdaq off 25.

LIVE CATTLE

The live market closed sharply higher, supported by aggressive short-covering, technical-buying and the bullish lead of feeder futures. Prices settled 190 to 300 points higher with spot February landing its best finish since Nov. 29. Beef cut-outs: mixed, up $0.22 (select: $204.54) to off $0.46 (choice: $204.54) with light-to-moderate demand and light offerings (44 loads of choice cuts, 20 loads of select cuts, 8 loads of trimmings, 14 loads of ground beef).

FRIDAY'S CASH CATTLE CALL:

Steady to $2 higher. While most trading is probably done for the week, packers will have to pay more given the late hour and board's recovery if they still have slaughter needs.

FEEDER CATTLE:

Feeder futures shot sharply higher, inspired by a few positive surprises in the semiannual cattle inventory released Wednesday. Between a smaller-than-expected increase in the 2017 calf crop (i.e., up 2% while the initial guess last July had been up 3%) and a 7% increase in all cattle on feed Jan. 1, the feeder supply outside of feedlots as the new year began turned out to be 2.6% below the previous year. Prices settled 300 to 450 points higher with spot March notching the best finish since late November. CME cash feeder index: 01/31: $147.95, up $0.44.

LEAN HOGS:

Lean futures closed mostly 30 to 160 points higher with spot February attracting the most buying interest. Indeed, the lead month scored a new contract high, supported by further reports of more determined packer spending in the country. While summer months closed moderately higher, they remain trapped below 40-day moving averages. The carcass value closed significantly lower, checked by softer demand for ribs, butts, hams and picnics. Pork cut-out: $81.82, off $0.91. CME cash lean index for 01/30: $73.85, up $0.01 (DTN Projected lean index for 01/31: $73.87, up $0.02). 

FRIDAY'S CASH HOG CALL:

Steady to $1 higher. Expect hog buyers to resume late-week work with steady/firm bids with some plants still needing inventory for Saturday and starters for next week.