Thursday Closing Livestock Market Update - Cattle Futures Crash to New Lows

GENERAL COMMENTS

Triggered by an odd combination of defensive futures and short bought packers, moderate trade volume developed in most areas of cattle feeding country. Both live and dressed prices were essentially steady with last week (i.e., $126-to-127; mostly $204, a few up to $205). According to the closing report, the national hog base is .37 lower ($54.00-to-$63.50, weighted average $62.41). The corn market jumped as much as 6 cents higher, with buying strength tied in part to the USDA's reduction in its estimate of the 2017-18 carryout. The stock market closed generally higher with the Dow up 93 points and the Nasdaq better by 31.

LIVE CATTLE

Pressured by long liquidation, technical selling and negative psychology, live issues settled 65-to-155 lower. Curiously, spot April closed nearly $5 below much of Thursday's cash business. April through August slumped to multi-month lows with the spot closing at its lowest level since January 16. Beef cut-outs: higher, up $.31 (choice: $223.88) to $1.58 (select: $216.78) with light to moderate demand and light offerings (73 loads of choice cuts, 15 loads of select cuts, zero loads of trimmings, eight loads of ground beef).

FRIDAY'S CASH CATTLE CALL:

Steady with Thursday. Light to moderate clean-up seems likely on Friday, especially in the north. Southern business may be done for the week.

FEEDER CATTLE:

Feeder futures tanked by 202 to 242 points, pressured by technically selling, higher action in the corn market and deepening discounts in deferred live contracts. Spot March closed at its lowest point since January 11. CME cash feeder index: 03/07: 144.72, off .24.

LEAN HOGS:

Oversold lean futures tried to stabilize near the end of another bearish week. Yet such an effort accomplished no better than mixed settlements. Closing prices ranged from up 27 to off 62. Summer contracts seemed to attract the most selling interest, losing ground on both spot April and the far deferreds. The mudslide in carcass value continued Thursday with the belly primal losing another $5.88. Pork cut-out: $72.99, off $1.72. CME cash lean index for 03/06: 67.66, up .14 (DTN Projected lean index for 03/07: 67.64, off .02).

FRIDAY'S CASH HOG CALL:

Steady to $1 lower. Hog buyers should remain on the defensive in the morning, mindful of struggling wholesale pork demand and tighter processing margins.