Friday Closing Livestock Market Summary - Cattle Bulls Take Back Midweek Loss With Vengeance

GENERAL COMMENTS

Although cattle buyers delayed procurement chores until after the on-feed report, late-afternoon business was definitely higher. Light-to-moderate trade volume has been reported in parts of the South at $126-$127, $3-$4 higher than last week. Most dressed deals (moderate volume) in the North were marked at $200, $5 higher than last week's weighted average basis Nebraska. According to the closing report, the national hog base is $0.42 lower ($62-$70), weighted average $69.49). Corn futures settled a penny plus higher, concluding yet another going-nowhere week. The stock market once again popped sharply higher with the Dow up 225 points and the Nasdaq better by 94.

LIVE CATTLE

Price action here through the first hour or so made watchers of drying paint look ambitious. But somehow, just before midsession, live contracts suddenly caught fire. Maybe bulls caught word that short-bought packers would soon have to pay through the nose for immediate slaughter needs. Whatever, live contracts settled 115 to 212 points higher. The late-week rally didn't quite reach Wednesday's peak, but it came pretty close. Indeed, contracts could gap above these high-water markets on Monday, possibly inspired by Friday's sharply higher round of cash business. The Jan. 1 on-feed report landed quite close to trade expectations: on feed, up 8%; placed in December, up 1%; marketed in December, off 1%. Beef cut-outs: higher, up $0.06 (choice: $206.83) to $0.51 (select: $201.83) with moderate demand and light offerings (43 loads of choice cuts, 15 loads of select cuts, 9 loads of trimmings, 15 loads of ground beef).

MONDAY'S CASH CATTLE CALL:

Steady to $2 higher. Monday will be typically slow with packers focused on the assessment of new showlists. It's a good bet that ready numbers will be once again priced sharply higher (e.g., $130-$132 on a live basis) given the impressive late-week cash showing.

FEEDER CATTLE:

Feeders followed their live counterparts sharply higher. Closing settlement were in the green by 210 to 280 points. March closed back above its 40-day moving average, by the 100-day moving average around $147.81 remains formidable chart resistance. CME cash feeder index: 01/25: $147.06, off $0.62.

LEAN HOGS:

For the most part, lean issues closed modestly lower, off 5 to 20. There was some effort to stage a short-covering rally before retiring for the weekend. But even that limited goal could sustain the necessary energy. Looking at the week as a whole, lean hog charts didn't actually sink from Monday to Friday, but they definitely took on water. Both spot February and April closed below 40-day moving averages. Carcass value closed moderately higher thanks to better demand for loins, hams and bellies. Pork cut-out: $80.67, off $0.28. CME cash lean index for 01/24: $73.77, off $0.03 (DTN Projected lean index for 01/25: $73.77, unchanged).

MONDAY'S CASH HOG CALL:

Steady. Look for hog buyers to reconvene early next week with basically steady bids.