Friday Closing Livestock Market Summary

GENERAL COMMENTS

The cash cattle trade was limited to scattered sales in parts of the North at $132.50 live and $208.00-$210.00 dressed. The national hog base closed off $0.75 compared with the Prior Day settlement ($67.00-$73.00, weighted average $71.01). From Friday to Friday, livestock futures scored the following changes: Jun LC Off $0.75; Aug LC Off $2.10; Aug FC Off $3.50; Sep FC Off $3.47; Jun LH Up $2.32; Jul LH Up $1.73. Corn futures closed a nickel higher, supported in part by reports of wide spread replanting activity. The stock market closed narrowly mixed with the Dow off 2 and the NASDAQ up 4.

LIVE CATTLE

Futures closed sharply lower, off 122-285. Before the release of the on-feed report at 11 a.m. CDT, losses here were no worse than moderate in light volume as profit-taking and long-liquidation took their late-week toll. Yet after the government confirmed larger-than-expected April placement activity, selling interest accelerated, tied both to commercial hedgers and specs covering long positions. The May 1 on-feed report looks like this: on feed up 2%; placed in April up 11%; and marketed in April up 3%. Beef cut-outs: weak (choice, $245.60 off $0.51, select $218.45 off $0.53) on light-to-moderate demand and offerings (47 loads of choice cuts, 39 loads of select cuts, 03 loads of trimmings, 15 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL:

Steady to $2 lower. Tuesday's activity will be limited to the collection of new showlists. Additionally, both buyers and sellers will pause to evaluate the success of Memorial Day meat clearance.

FEEDER CATTLE

Futures closed sharply lower, off 352-430. Feeders also took the on-feed news hard. Indeed, feeder contracts lost significantly more ground than their live counterparts. The additional selling energy may have been tied to the discounted status of the cash index as well as the firming action of late week corn. CME cash feeder index: 05/25: $143.89, up $0.80.

LEAN HOGS

Futures closed mixed, off 17 to up 132. Summer contracts finished a very successful week by scoring another round of new contract highs. With June through August all over 81, summer bulls are clearly anticipating an extended period of declining market hog numbers and improving pork demand. With summer issues surrounded by such optimism bull-spreading has become a very popular strategy (i.e., looking to lift nearby contracts and pressure the fourth-quarter). Pork cut-out: $90.28 (FOB Plant) off $0.02. CME cash lean 05/24: $76.25, up $0.18 (DTN Projected lean index for 05/25: $76.34, up $0.09). 

TUESDAY'S CASH HOG CALL

Steady to $1.00 higher. Hog buyers should return from the holiday ready to bid higher on an expected decline in ready numbers.