Friday Closing Livestock Market Summary - Cattle Futures Closed Mostly Higher Thanks To Late-Week Short-Covering

GENERAL COMMENTS

The cash cattle trade was very quiet Friday with buyers and sellers apparently content with the trade volume generated on Wednesday and Thursday. We could see a certain number of unsold cattle carried over into Monday, resulting in some increase in the size of showlists. The National hog base closed off $1.13 compared with the Prior Day settlement ($64.00-$68.00, weighted average $66.73). From Friday to Friday livestock futures scored the following changes: Aug LC off $0.42; Oct LC up $1.02; Aug FC up $0.87; Sep FC up $2.90; Oct LH off $3.05; Dec LH off $2.37. Corn futures closed 2-3 cents lower, pressured by a lack of buying interest and growing confidence and prospects for a fully adequate harvest later this fall. The stock market closed mixed with the Dow up 30 and the NASDAQ off 5.

LIVE CATTLE

Futures closed steady/higher, up 0-92. Late-week activity seemed rather lackluster, perhaps a function of nervousness ahead of the August 1 Cattle on Feed report. The feedlot inventory turned out to be somewhat friendlier than expected: on feed up 4%; placed in July up 3%; marketed in July up 4%. Specifically, last month's placement activity was smaller than expected. The average trade guess was up 6%. Beef cutouts: weak (Choice, $191.32 off $0.43, Select $188.30 off $0.36) on light to moderate demand and offerings (69 loads of choice cuts, 21 loads of select cuts, 27 loads of trimmings, 23 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 look for ready numbers to be steady to somewhat larger. Keep in mind that packers will be buying for a shorter kill schedule following Labor Day. Such a reality could limit their willingness to support live prices.

FEEDER CATTLE

Futures closed mostly higher, up 102 to off 22. Feeder issues came in to the week generally oversold, and most contracts enjoyed a fairly decent corrective balance. Indeed, we are closing the week with the board much closer to the cash index than it was last Friday. CME cash feeder index: 08/24: $143.24, off $0.18.

LEAN HOGS

Futures closed lower, off 5-70. Late-year supply fears continue to pressure lean futures pretty much throughout the week. Moderate losses today seemed tied to further cash erosion and struggling carcass value. In closing at 63.07, spot October settled at its lowest point seen since December 2. Pork cutout: $86.41 (FOB Plant) off $0.77. CME cash lean 08/23: $79.40, off $1.09 (DTN Projected lean index for 08/24: $78.23, off $1.17).

MONDAY'S CASH HOG CALL:

$1-$2 lower. Look for cash hog buyers to remain on the defensive when business resumes on Monday, mindful of both generous country offerings and struggling pork product demand.