GENERAL COMMENTS
Cash cattle trade developed in Nebraska at $215 per cwt dressed basis. These prices were paid by regional packers and were $6 lower than last week's average prices. Sales on the weekly Fed Cattle Exchange Auction report Wednesday listed a total of 2,379 head, with 1,621 actually sold, and 758 head listed as unsold. The state-by-state breakdown looks like this: KS 309 total head, with 267 head sold at $134.00-$135.75; NE 758 total head, with 394 head sold at $130.00-$134.25; TX 966 total head, with 893 head sold at $133.75-$135.75; CO 108 total head, all unsold; IA no test; other states 238 total head (in SD and OK) with 67 head sold in OK at $134.00. The weighted averages are as listed: 1-9 day delivery: 814 head, $135.16; 1-17 day delivery 570 head, $134.28; 17-30 day delivery 237 head, $130.84. According to the closing report, the national hog base is $0.05 higher compared with the Prior Day settlement ($66.00-$72.50, weighted average $71.24). The corn futures moved higher in light activity. May futures were 3 cents higher Friday. The Dow Jones Index is 372 points lower with the Nasdaq down 158 points.
LIVE CATTLE
Live cattle regained moderate support (0.30 to $0.57 higher) as early buyer activity stepped back into the market. This helped to draw traders back into the complex, and sparked early triple-digit gains in the front-month June contracts. Midday pressure pushed prices well off of session highs, although prices remained higher through most of the session. The ability to sustain higher prices during closing bell continues to bring stability in the market and points to firming commercial support at the end of the week. Beef cut-outs: lower, $2.46 lower (select, $221.93) to down 1.71 (choice, $248.17) with light demand and offerings (72 loads of choice cuts, 51 loads of select cuts, 7 loads of trimmings, 13 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL:
$2 to $6 Lower. Early trade started to develop in the North with dressed trade seen at regional packers at $215 per cwt. This is as much as $6 per cwt below last week's average. Although there still needs to be additional trade done for the week, the concern that overall price weakness will remain lower than last week seems to be the general consensus, and this may not change before the week's end.
FEEDER CATTLE
Feeder cattle futures closed higher despite trading directionless through most of the session. Tight price groupings developed in all but front-month contracts ($0.02 to $1.02 higher) as the stability in cattle markets helped to draw buyers back into the complex. There is expected to be some renewed buyer support moving back into the complex, although the inability to bring underlying support in the market could limit commercial buyer interest over the long term. May contracts posted the most support, but with May futures already at a significant discount to the rest of the complex, the focus is being placed on the moves in August and September prices around $147 per cwt. CME cash feeder index: 5/16: $142.12, down $0.08.
LEAN HOGS
Lean hog futures closed mixed ($0.47 lower to $0.35 higher) in a very narrow trading range following early strong gains which tested resistance levels of $80 per cwt in nearby summer contracts. Both June and July contracts posted contract highs of $79.95 through the morning but were unable to break through the $80-per-cwt threshold. After being unable to crack this barrier, buyer support quickly gave way, with prices moving to a directionless market shift through the last hour of trade. Carcass values are firmly higher. Light losses in bellies was quickly overshadowed by strong gains in all other primals. Pork cut-out: $87.26 up $2.18. CME cash lean index for 5/15: $73.01, up $1.13. DTN Projected lean index for 5/15: $74.14, up $1.13.
THURSDAY'S CASH HOG CALL
Steady to $1 Higher. Additional buyer support is expected to develop across the complex with traders looking for increased hogs through the end of the week. Increased spending is expected to be seen with the full range seen from steady to $1 per cwt higher as most bids will be 50 cents per cwt higher. Thursday runs are expected to reach 438,000 head as Saturday levels are likely to approach 83,000 head.
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