GENERAL COMMENTS
Feedlot managers won another Friday showdown,
forcing short-bought packers to pay significantly higher prices for
ready cattle. Most of the live business in the South was marked at $124,
$2 higher than last week. On the other hand, Northern packers paid as
much as $126 on a live basis ($4 higher than last week basis Nebraska)
and $198 to $199 on a dressed basis, $8 to $9 higher. The National hog
base closed off $0.11 compared with the Prior Day settlement
($52-$58.50, weighted average $58.22). From Friday to Friday, livestock
futures scored the following changes: Apr LC up $5.10; Jun LC up $3.28;
May FC up $2.70; Aug FC up $3.75; Jun LH off $4.93; Jul LH off $3.80.
Corn futures closed 3 cents plus higher, supported by dry conditions in
Brazil and sharply higher bean trading. The stock market closed on a
mixed basis with the Dow off 11 point and the Nasdaq up 1.
LIVE CATTLE
Futures closed sharply higher, up 10 to 265. The
late-week bullish reaction was mostly tied to greater cash spending in
feedlot country. Technical-buying also became a factor as contracts
scored multi-month highs. Note that June gained significantly on spot
April, erasing some of its enormous discount as it prepares to assume
the spot position next Tuesday. Beef cutouts: higher on choice and
steady on select (choice $221.74, up $1.59; select $204.32, off $0.16)
on moderate demand and light offerings (30 loads of choice cuts, 27
loads of select cuts, 8 loads of trimmings, 26 loads of coarse grinds).
MONDAY'S CASH CATTLE CALL:
Steady to $2 higher. Activity on Monday will be
typically limited to the distribution of new showlists. We expect ready
numbers to be steady to somewhat larger. Bullish-minded feedlot managers
will certainly not hesitate in pricing cattle at least $2 to $3 higher.
FEEDER CATTLE:
Futures closed mostly sharply higher, up 175 to
off 42. Feeder traders were obviously motivated to keep pace with rising
prices in the live market. Note that the August contract closed the
week above its 100-day moving average, landing its best close since
March 12. CME cash feeder index: 04/26: $139.99, up $0.50.
LEAN HOGS:
Futures closed mostly sharply lower, off 35 to
137. Summer lean hog issues experienced a tough week, repeatedly hit
hard by long liquidation and fears of unmanageably large lean supplies.
The June contract closed at 72.62, the lowest level seen since April 3.
Seasonally, there is still plenty of time for bulls to put together a
decent rally. Having said that, it doesn't appear as though anyone is
anticipating better news around the next corner. Pork cutout: $68.61
(FOB Plant), up $0.76. CME cash lean 04/25: $61.23, up $0.79 (DTN
Projected lean index for 04/26: $61.75, up $0.52.
MONDAY'S CASH HOG CALL:
Steady. Hog buyers are expected to resume
business on Monday with steady bids, hoping that this week's smaller
kill will help stabilize and firm the wholesale pork trade.
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