Thursday Closing Livestock Market Summary - Futures Shift Higher in Light Trade

GENERAL COMMENTS

Cash cattle markets saw very light trade Thursday afternoon with the majority of trade seen Wednesday afternoon. Cash prices appear to be essentially set with afternoon trade seen in the same ranges as earlier in the week. This activity was seen from 50 cents to $2 per hundredweight (cwt) higher than last week's price levels. According to the closing report, the national hog base is $0.15 lower compared with the Prior Day settlement ($50-$57.20, weighted average $55.83). Corn futures moved higher in light activity with March futures 2 cents higher. The Dow Jones Index finished 89 points higher with the Nasdaq up 18 points.

LIVE CATTLE

Light-to-moderate buyer support stepped back into the complex Thursday, with futures ending $0.10 to $0.72 higher. There is likely to be very little additional market activity seen over the near future with markets closing early Friday and remaining closed until Tuesday. The entire livestock complex is expected to remain sluggish and lightly traded through the end of December. Beef cut-outs: higher, $1.38 higher (select, $186.87) and up $0.03 (choice, $198.12) with moderate demand and light offerings (55 loads of choice cuts, 27 loads of select cuts, 3 loads of trimmings, 17 loads of coarse grinds).

FRIDAY'S CASH CATTLE CALL:

Steady with early week trade. Cash activity is expected to be essentially done for the week following firm price support midweek. Given that prices have already been established, the potential for light clean-up activity may develop. This may spark some additional momentum heading into next week.

FEEDER CATTLE:

Strong gains moved back into the feeder cattle futures with most contracts posting firm gains ($0.20 lower to $1.15 higher). The sharp losses seen over the last two trading sessions have created an oversold status in the cattle complex as buyers moved back into the market with moderate to strong buyer support seen in nearby contracts. Front-month January futures posted the most aggressive gains of $1.15 per cwt, while the rest of the futures contracts struggled to break out of the tight trading range. CME cash feeder index for 12/19 is $152.47, down $0.03.

LEAN HOGS:

Narrow gains slowly developed across the futures complex Thursday ($0.07 to $0.20 higher). Trade volume remained extremely light as traders focused on positioning contracts ahead of the holiday weekend. With an early close in futures trade Friday, it is expected that overall market participation will be at a minimum. Most contracts posted 10- to 15-cent gains in extremely sluggish trade. Carcass values firmed as all primals moved higher Thursday, with the exception of belly markets. Pork cut-out: $77.25 up $0.74. CME cash lean index for 12/19 $62.38, down $0.33. DTN Projected lean index for 12/20 $62.00 down $0.38.

FRIDAY'S CASH HOG CALL:

Steady to $1 lower. Sluggish market activity is expected to be seen through the end of the week with early bids Friday likely to be seen steady to $1 per cwt despite the gains in futures trade the last couple of days. Most bids are expected to be steady to 50 cents lower heading into the holiday weekend. Plant runs are expected to be at 465,000 Friday. Due to the holiday schedule, plants are expected to have a run of 135,000 head Saturday.