Friday Closing Livestock Market Summary - Livestock Futures Shift Lower in Late Week Trade

GENERAL COMMENTS

From Friday to Friday livestock futures scored the following changes: Feb LC off $0.33; Apr LC off $2.50; Mar FC off $4.72; May FC off $3.45; Feb LH off $2.03; Apr LH off $4.70. Cash cattle trade has slowly developed through the afternoon Friday, although it is expected that more cattle will be traded before the end of the night. Prices have been seen in the North and South with live basis prices at $125-to-$126 per cwt, with dressed deals seen at mostly $200 per cwt although the range is seen from $196 to $202 per cwt. According to the closing report, the national hog base is $0.22 per cwt higher with an average price of $69.72 per cwt (trading range: $61.00-to-$72.50). The corn futures are lower in light activity. March futures were 3 cents lower Friday. The Dow Jones Index is 330 points higher with the Nasdaq up 97 points.

LIVE CATTLE

Markets closed mixed to mostly lower Friday with the most aggressive pressure developing in early 2019 contract months, while spot prices moved firmly higher (0.30 lower to $0.75 higher). Despite spot month contracts holding a 75-cent gain, this was the only contract to hold gains during the Friday session. The rest of the complex posted light to moderate losses following growing pressure in feeder cattle futures. Beef cut-outs: lower, $1.05 lower (select, $202.74) and down $2.01 (choice, $206.52) with light demand and offerings (62 loads of choice cuts, 20 loads of select cuts, 19 load of trimmings, 32 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady. With cash cattle trade still just starting to develop late afternoon Friday, Monday activity is likely to remain typically light with show list distribution and inventory taking the main order of business.

FEEDER CATTLE:

Moderate to strong losses have continued to develop across the feeder cattle market as traders tried to adjust markets lower following the recent market volatility ($0.27-to-$1.17 lower). Strong pressure developed in nearby contracts with front month spot futures posting a $1.05 per cwt loss. Early mixed trade has created some additional market activity but buyers quickly stepped away from the market at the end of the session. This could likely bring some increased volatility to the entire cattle complex over the next week. CME cash feeder index for 2/8 is $147.57, down $0.45.

LEAN HOGS:

Moderate pressure redeveloped across the complex with late week losses creating uncertainty through the entire market ($0.22-to-$0.80 lower). The continued weakness seen in all livestock markets has created moderate to widespread pressure through the entire complex. There is growing stability that tries to develop over the last couple of days, but at this point, only limited activity can move into the market. There is growing firmness in nearby contracts while deferred markets are showing the most aggressive losses. Carcass values tumbled once again following a strong loss in belly markets that posted price reductions of $12.67 per cwt. This overall lack of support in all markets is keeping the entire market under pressure. Pork cut-out: $74.44 down $2.48. CME cash lean index for 2/7 $75.63 up $0.25. DTN Projected lean index for 2/8 $75.38 down $0.25.

MONDAY'S CASH HOG CALL:

Steady to $2 lower. Strong pressure is expected to redevelop in cash hog prices early in the week. Most bids are expected to be $1 per cwt lower as traders continue to assess the overall market direction and recent pressure in hog trade.