Friday Closing Livestock Market Summary

GENERAL COMMENTS

The cash cattle trade was very quiet Friday with both bids and asking prices difficult to identify. Given sharply lower sales at midweek, some producers simply decided to carry cattle over into Monday rather than entertain still lower packer bids. The national hog base closed off $0.29 compared with the prior day settlement ($83.50-$88.25, weighted average $85.85). From Friday to Friday, livestock futures scored the following changes: Jun LC Off $2.50; Aug LC Off $2.90; Aug FC Off $2.92; Sep FC Off $2.95; Jul LH Up $2.98; Aug LH Off $0.47. Corn futures closed generally a nickel lower, further pressured by predictions of near-ideal growing weather. Note that December corn set a new low for 2017 (i.e. $3.74). The stock market closed on a mixed basis with the Dow off 2 points and the Nasdaq off by 28. `

LIVE CATTLE

Futures closed higher up 32-100. Friday's rally came at the tail-end of a defensive week, one pressured by sharply lower feedlot sales and eroding wholesale beef prices. Spot June is scheduled to expire next Friday, so nearby sellers will pay close attention to near-term cash stability. The June 1 on feed report turned out to be slightly negative with May placement totaling a bit more than the average trade guess anticipated: on feed up 3%; placed in May up 12%; marketed in May up 9%. Beef cut-outs: sharply lower on choice and steady on select (choice, $239.75 off $3.13, select $216.72 off $0.20) on light-to-moderate demand and offerings (56 loads of choice cuts, 17 loads of select cuts, 08 loads of trimmings, 06 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady to $2 lower. Monday's activity will be typically limited to the distribution of new showlists. We expect the new offering to be generally larger thanks to the maturing of more fed calves and unsold leftovers from this week.

FEEDER CATTLE

Futures closed sharply higher, up 125-207. The late round of triple-digit gains seemed to be largely sponsored by profit-taking. Additionally, the premium status of the cash feeder index and further erosion in corn prices may have been two additional factors of support. CME cash feeder index: 06/22: $147.09, off $1.09.

LEAN HOGS

Futures closed mostly lower, off 122 to up 27. Although spot July closed modestly higher, it will start next week nearly $5 under the cash index. Clearly, nearby board traders are both bullish and cautious. The August contract especially seems to suggest anxiety regarding the transition to larger numbers of ready barrows and gilts. While the late-summer contract traded as high as $82.37 on Thursday, it closed the week nearly $4 below that level, as well as south of its 40-day moving average. Keep in mind that the June 1 hogs and pigs report is scheduled to be released next Thursday. Pork cut-out: $101.15 (FOB Plant) up $1.63. CME cash lean 06/21: $89.30, up $1.27 (DTN Projected lean index for 08/22: $90.17, up $0.87). 

MONDAY'S CASH HOG CALL

Steady to $1 higher. Look for cash buyers to start out next week with bids steady to $1 higher. Country supplies are expected to remain relatively tight for another 30 days or so.