Friday Closing Livestock Market Summary

GENERAL COMMENTS

Moderate trade volume developed in most areas of cattle country. Live business in the South was marked at $120.00, nearly steady with last week. Dressed business in the North ranged from $188.00-$190.00, generally $2.00 lower than last week. The National hog base closed off $0.88 compared with the Prior Day settlement ($78.00-$84.50, weighted average $83.33). From Friday-to-Friday livestock futures scored the following changes: Aug LC Off $1.38; Oct LC Off $1.17; Aug FC Off $1.32; Sep FC Off $0.92; Aug LH Up $1.20; Oct LH Off $12.68. Corn futures closed generally $0.11 lower, pressured by late week profit taking. Reports of blistering temperatures over parts of the Corn Belt did not seem to spark buying interest. The stock market closed lower with the Dow off 31 and the NASDAQ down by 2.

LIVE CATTLE

Futures closed moderately higher up 7-55. Late week traders managed to move the market some higher following Thursday's crash. Supporting factors included late week profit taking and reports of cash stability. Note that futures closed the week in the same old trading range that has generally persisted since Memorial Day. The July 1 on feed report turned out to be somewhat negative thanks to a much larger placement total for June than expected (i.e., the largest since the early summer of 2006). On feed totals look like this: on feed up 4%; placed in June up 16%; marketed in June up 4%.

Beef cutouts: lower (Choice, $206.91 off $0.74, Select $194.80 off $0.78) on light to moderate demand and heavy offerings (78 loads of choice cuts, 30 loads of select cuts, 13 loads of trimmings, 23 loads of coarse grinds).

MONDAY’S CASH CATTLE CALL: Steady. Monday's activity will be typically limited to the distribution of new showlists. We expect ready numbers to be steady to somewhat larger with asking prices $1.00-$2.00 higher.

FEEDER CATTLE

Futures closed moderately to significantly higher up 50-110. Feeder contracts also rebounded from Thursday's sell-off, supported by short-covering and late week profit taking. Additionally, sharply lower corn futures also worked to attract buying interest in feeder cattle. CME cash feeder index: 07/20: $149.03, up $1.81.

LEAN HOGS

Futures closed mixed up 35 to off 97. Most contracts closed lower with just a few far deferred issues finishing in the green. Hog futures continue to struggle with the question regarding slaughter numbers in the last third of the year. Specifically will they overwhelm expanded slaughter capacity or fall short of that level. Note that new spot August closed the week nearly $10.00 under the latest estimate of the cash index. Pork cutout: $102.78 (FOB Plant) off $1.24. CME cash lean 07/19: $92.00, off $0.40 (DTN Projected lean index for 07/20: $91.67, off $0.33).

MONDAY'S CASH HOG CALL: $1.00 lower. Hog buyers are likely to start out on Monday on the defensive, sensing both larger offerings and more defensive wholesale pork demand.