GENERAL COMMENTS
The cash cattle trade was generally quiet Friday following aggressive packer buying on Thursday. Scattered sales were noted in parts of the North (e.g. $192 dressed/$124-$125 live). The National hog base closed off $0.91 compared with the Prior Day settlement ($56.50-$63, weighted average $62.33). From Friday to Friday, livestock futures scored the following changes: Dec LC up $6.48; Feb LC up $6; Nov FC up $4.40; Jan FC up $5.57; Dec LH up $0.65; Feb LH up $1.72. Corn futures closed generally 0.02 cent lower, pressured by spillover selling from the bean market and a general lack of buying interest. The stock market closed higher with the Dow better by 22 points and the Nasdaq positive by 49.
LIVE CATTLE
Futures closed mostly sharply higher, up 77 to 300. Once again, cattle bulls pushed most live contracts to new highs. The trade opened sharply higher given Thursday's impressive gains in the cash market. There is a disagreement among some as to whether the board is pulling cash higher or if cash is pushing the board higher. Either way, market psychology has turned more positive this fall than most anticipated. Beef cut-outs: firm on Choice and steady on Select (Choice, $208.74 up $0.49, Select $193.08 off $0.08) on moderate demand and offerings (46 loads of choice cuts, 42 loads of select cuts, 14 loads of trimmings, 14 loads of coarse grinds).
MONDAY'S CASH CATTLE CALL:
Steady to $2 higher. Monday's activity will be limited to the distribution of new showlists. We expect ready numbers to be steady to somewhat larger. Asking prices will no doubt be higher given the remarkable success of the last two weeks.
FEEDER CATTLE:
Futures closed sharply higher up 250 to 330. Aggressive commercial buying was once again strong enough to push all feeder months to new contract highs. Needless to say, the languishing of the fall corn market has done nothing but sharpen the bullish focus and implications of deferred live futures upon feeder values. CME cash feeder index: 11/02: $159.23, up $0.52.
LEAN HOGS:
Futures closed mostly lower off 70 to up 10. The late-week action here was quite lackluster as traders argued over prospects for supply and demand fundamentals through the balance of the fourth quarter. While some believe weekly slaughter is set to increase significantly over the next 30 days or so, others suggest that market hog numbers may not get much larger than those seen in recent weeks. Pork cut-out: $80.08 (FOB Plant) up $0.68. CME cash lean 11/01: $69.42, up $0.12 (DTN Projected lean index for 11/02: $69.28, off $0.14.
MONDAY'S CASH HOG CALL:
Steady to $1 lower. Cash hog traders should resume work on Monday a bit on the defensive, cautious about the possibility of larger late-fall offerings and deeply desiring to carve out bigger processing margins.
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