Friday Closing Livestock Market Summary - Cattle Future Close Defensive Week With Further Losses

GENERAL COMMENTS

The cash cattle market was very quiet Friday with buyers and sellers generally content with the level of business transacted on Wednesday. Some cleanup buying interest was evident in parts of the North, but volume did not amount to much. The National hog base closed off $0.05 compared with the Prior Day settlement ($56.00-to-$63.00, weighted average $62.29). From Friday to Friday, livestock futures scored the following changes: Apr LC off $2.68; Jun LC off $2.40; Mar FC off $2.33; May FC off $2.85; Apr LH off $3.80; May LH off $2.95. Corn futures closed about a penny lower thanks to late profit-taking at the conclusion of a bullish week. Nearby corn futures rallied more than a dime through the week, supported by worsening news of drought in Argentina. The stock market closed on a mixed basis with the Dow off 70 and the NASDAQ up 77.

LIVE CATTLE

Futures closed moderately to sharply lower, off 7 to 115. Although the board momentarily opened near steady, selling interest quickly regrouped. Despite the fact that February expired at a substantial premium to April at midweek, new spot April focused on building a larger discount to cash. Apparently nearby traders are worried about late winter fed supplies and insufficient beef demand prior to Easter. Spot April closed at its lowest point since January 16. Beef cut-outs: steady on Choice and lower on Select (Choice: $222.52, up $0.22, Select: $214.64, off $0.96) on light to moderate demand and light offerings (31 loads of choice cuts, 21 loads of select cuts, three loads of trimmings, 14 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady to $2 lower. Monday should be typically slow with activity limited to the distribution of new showlists. Both buyers and sellers will be closely monitoring the relationship between spot April live futures and recent feedlot sales.

FEEDER CATTLE:

Futures closed mostly sharply lower, off 80 to 147. Like their live counterparts, feeders were further pressured by long liquidation and technical selling. Spot March closed at its lowest point since January 12. Note that the August contract did manage to settle slightly above both 40-day and 100-day moving averages. CME cash feeder index: 03/01: $146.06, off $1.30.

LEAN HOGS:

Futures closed mixed, up 67 to off 82. Hog bears called off the dogs somewhat Friday, at least enough for lean issues to close mixed. Short-covering/profit-taking was most evident in nearby April and May. Nevertheless, summer contracts clearly took a beating this week with June closing below the psychological threshold of $80 for the first time since February 16. Weekly slaughter numbers are expected to stay fairly high (i.e., close to 2.4 million head) for at least another 30 days, and such tonnage could continue to tax late winter pork demand. Pork cut-out: $78.11 (FOB Plant) up $0.73. CME cash lean 02/28: $68.36, off $0.21 (DTN Projected lean index for 03/01: $68.09, off $0.27.

MONDAY'S CASH HOG CALL:

Steady. Opening cash hog bids on Monday are expected to be near steady.