Friday Closing Livestock Market Summary

GENERAL COMMENTS

The cash cattle trade was limited to scattered sales in parts of the North. Prices included $137.50 on a live basis and $216.00-$220.00 dressed. For the most part, activity was essentially completed on Thursday thanks to aggressive packer spending. The national hog base closed off $0.39 compared with the prior day settlement ($69.00-$75.00, weighted average $72.98). From Friday to Friday, livestock futures scored the following changes: Jun LC Up $8.12; Aug LC up $7.10; Aug FC Up $11.77; Sep FC Up $11.07; Jun LH Off $0.60; Jul LH Up $0.07. Corn futures closed roughly 2 cents higher, supported by spillover buying from the bean market and uncertain production potential in the growing season ahead. Ignoring the disappointing jobs report, the stock market closed higher. Indeed both the Dow and NASDAQ scored new all-time highs up 62 and 58 respectively.

LIVE CATTLE

Futures closed mixed, up 340 to off 25. Spot June gapped higher on the opening with buyers racing to follow sharply higher feedlot business. Bull-spreading once again proved to be a popular strategy, one that favored June and August and pressured October through April. Having said that, note that October and December rallied early in the session, enough to set new contract highs before being pressured late by spreading activity. Beef cut-outs: weak on choice and higher on select (choice, $245.24 off $0.34, select $218.06 up $0.84) on light-to-moderate demand and moderate-to-heavy offerings (56 loads of choice cuts, 56 loads of select cuts, 17 loads of trimmings, 27 loads of coarse grinds).

   

MONDAY'S CASH CATTLE CALL:

Steady to $2 higher. Monday's activity will be typically limited to the distribution of showlists. We expect ready numbers to total somewhat larger than this week. Feedlot managers will probably not hesitate to price new showlists higher (e.g., $138.00-$140.00 basis the South).

FEEDER CATTLE

Futures closed higher, up 32 to 165. Bullishness in the feeder trade was obviously tied to buying energy in the live trade. Given the fact that many cattle feeders are now scoring profits of $400 per head or more, commercial buying interest remains quite strong. CME cash feeder index: 06/01: $149.80, up $2.69.

LEAN HOGS

Futures closed mostly higher, up 30 to off 30. Lean hog contracts enjoyed significant strength through the first half of the week with summer issues scoring new contract highs more than once. However, profit-taking and long-liquidation surfaced to some extent on Thursday and Friday. Nevertheless, the market is closing the week with both long- and short-term trends positive. Pork cut-out: $91.40 (FOB Plant) off $0.04. CME cash lean 05/31: $76.79, up $0.26 (DTN Projected lean index for 06/01: $77.34, up $0.55).

MONDAY'S CASH HOG CALL

Steady to $1.00 higher. Cash hog buyers are likely to resume work on Monday with firm bids, encouraged both by decent processing margins and ideas of tightening country numbers.