Friday Closing Livestock Market Summary - Late-Week Profit-Taking Causes Upset in Livestock Futures to Close Mostly Lower

GENERAL COMMENTS

Market watchers had to be patient this week, but the cash cattle trade finally developed late Friday afternoon with packers paying more for short-term slaughter needs. Live sales in the South are mostly marked at $123, $3 higher than last week. Most dressed sales in the North were marked at $195, $3 higher than last week's weighted average basis Nebraska. The National hog base closed off $0.35 compared with the Prior Day settlement ($62-$71.50, weighted average $69.36). From Friday to Friday, livestock futures scored the following changes: Feb LC up $4.53; Apr LC up $3.27; Jan FC up $3.60; Mar FC up $2.95; Feb LH up $0.50; Apr LH up $1.18. Corn futures closed generally a penny higher, modestly firming from the lows set last week. The stock market settled higher with the Dow off 53 and the Nasdaq better by 40.

LIVE CATTLE

Futures closed lower, off 5 to 75. Late-week selling was linked to profit-taking, long-liquidation and cash uncertainty (i.e., packer spending did not develop until after futures closed). Despite the late-week fizzle, nearby contracts were successful in preserving technical progress scored earlier in the week. Note that spot February will start out about $1 below late-week feedlot business. Beef cut-outs: weak to lower (Choice, $204.86 off $0.83, Select $200.16 off $0.71) on light-to-moderate demand and offerings (62 loads of choice cuts, 18 loads of select cuts, 11 loads of trimmings, 15 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady to $2 higher. Monday's activity will be typically slow with packers focusing on the collection of new showlists. We expect ready numbers to be about steady.

FEEDER CATTLE:

Futures closed mostly sharply lower, off 35 to 157. Triple-digit losses were caused by long-liquidation and a general lack of buying interest January and March finished the week trapped between 40-day and 100-day moving averages (the latter now constituting overhead resistance). CME cash feeder index: 01/18: $148.01, up $1.54.

LEAN HOGS:

Futures closed mostly lower, off 97 to up 7. Lean hogs closed relatively mixed, completing a week of general consolidation. While nearby futures continue to hold near the top of the early year trading range, It is curious that spot February has closed the week more than $1.50 below the cash index. For the record, August scored a new contract high today. Pork cut-out: $81.44 (FOB Plant) up $0.77. CME cash lean 01/17: $73.55, up $0.56 (DTN Projected lean index for 01/18: $73.67, up $0.12.

MONDAY'S CASH HOG CALL:

Steady. Hog buyers are expected to resume work on Monday with generally steady bids.