GENERAL COMMENTS: Feedlot country was typically quiet to start the week with packers focusing on the distribution of new showlists. Ready numbers are mixed, larger in Kansas, steady in Colorado, and smaller in Nebraska and Texas. Overall, the mid-December offering looks somewhat smaller than last week. According to the closing report, the national hog base is $0.49 higher compared with the Prior Day settlement ($43-$48.56, weighted average $47.35). March corn closed down 1 1/2 cents, not getting much of a boost from Monday's bullish export news (i.e., USDA announced 34.5 million bushels of corn were inspected for export last week, enough to put total inspections up 76% from a year ago). Recovering from early weakness, the stock market closed higher with the Dow up 34 points.
LIVE CATTLE: Live futures closed on a mixed basis with nearbys losing ground to deferreds. Settlement ranged from up 32 cents to down 32 cents. Despite firmer packer spending on Friday, the board is reluctant to anticipate further late-year cash strength. Beef cut-outs closed mixed with the choice up $1.13 ($215.42) and select up $0.44 ($200.94). Box demand was called moderate to fairly good with moderate offering.
TUESDAY'S CASH CATTLE CALL: Steady to $2 higher. Bids and asking prices should remain poorly defined Tuesday with significant cash business probably delayed until the tail end of the week.
FEEDER CATTLE: Feeder issues finished solidly higher with contracts advancing by 52 to 87 cents. Spot January is willing to anticipate a new year recovery in the cash index. On an estimated run of 4,000 head (down from 11,426 last week and 7,129 in 2017), Oklahoma City sold feeder steers 600-700 lbs. $2-$3 higher and 700-800 lbs. $2-$3 lower on a lighter test. CME cash feeder Index for 12/07: $144.00 off $1.07.
LEAN HOGS: While the closing price spread here was mixed (i.e., up 47 cents to off $1.05), there seemed to be more red ink than green when the smoke cleared. Hog futures approach seasonal lows as CME lean hog contracts for February delivery fall 1.6%. Many traders are fearful that enough export demand next year can be uncovered to handle record 2019 pork tonnage. Carcass value opened the week on the defensive thanks to softer demand for loins, ribs and hams. The cut-out totaled $72.65, off $0.98. (DTN Projected lean index for CME cash lean index for 12/07: $56.12, up $0.16) CME cash lean index for 12/06: $56.96, off $0.23.
TUESDAY'S CASH HOG CALL: Steady to $1 lower. Look for the cash hog trade to open on the weak side in the morning as producers struggle to balance fundamentals.
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