Friday Closing Livestock Market Summary

GENERAL COMMENTS

The cash cattle trade was not tested Friday with most of the trade volume accomplished on Wednesday. Given somewhat limited trade volume totals, we could see a fairly large carryover factor affecting the size of next week's showlists. The National hog base closed off $0.67 compared with the prior day settlement ($73-$79.50, weighted average $77.85). From Friday to Friday, livestock futures scored the following changes: Aug LC Off $5.73; Oct LC Off $6.70; Aug FC Off $8.18; Sep FC Off $8.63; Aug LH Up $1.43; Oct LH Up $1.85. Corn futures closed 3 to 4 cents higher, supported by short-covering and light trade volume. The stock market closed generally higher with the Dow up 14 and the Nasdaq positive 39.

LIVE CATTLE

Futures closed higher, up 37-100. Prices drifted on both sides of unchanged for most of the session. But late-session short-covering caused the market to close moderately higher. Nevertheless, Friday's rally seemed no more significant than a dead-cat-bounce. Prices closed the week near four-month lows. Indeed, by falling out of the summer long trading range, live charts suffered significant technical damage. Beef cutouts: lower on choice and steady on select (choice, $199.60 off $1.03, select $196.12 off $0.07) on light-to-moderate demand and offerings (48 loads of choice cuts, 17 loads of select cuts, 07 loads of trimmings, 22 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady to $2 lower. Monday will be typically slow with packers focusing on the distribution of new showlists. We expect the midmonth offering to be somewhat larger than this week.

FEEDER CATTLE

Futures closed moderately to sharply higher, up 55-137. At the conclusion of a very tough week, feeder issues managed a moderate correction with October through January posting triple-digit gains. Spot August closed the week nearly $8 below the cash index. Like their live counterparts, feeder contracts made new four-month lows this week, closing at the lowest price level seen since late April. CME cash feeder index: 08/10: $145.96, off $1.97.

LEAN HOGS

Futures closed mixed, up 65 to off 37. Lean hog contracts followed a consistent trading pattern throughout the week with nearby contracts gaining on far deferreds. Spot August is scheduled to expire on Monday, and it has managed to converge nicely with the spot cash index. When October assumes the lead position, the big question will be whether the fall contract is excessively discounted relative to spot cash. Pork cutout: $94.44 (FOB Plant) off $0.73. CME cash lean 08/09: $85.50, off $0.12 (DTN Projected lean index for 08/10: $85.25, off $0.25).

MONDAY'S CASH HOG CALL:

Steady to $1 lower. Look for cash hog buyers to resume work on Monday with defensive bids, cautious regarding late-summer supplies and wholesale product demand.