Friday Closing Livestock Market Summary - Light Volume Erodes Cattle Support

GENERAL COMMENTS

From Friday to Friday, livestock futures scored the following changes: Jun LC, off $0.95; Aug LC, off $0.90; May FC, off $1.62; Aug FC, off $1.93; Jun LH, up $0.90; Jul LH, off $0.65. Cash cattle trade remains generally quiet Friday afternoon with some additional live trade scattered through the North at $126 per hundredweight (cwt). It appears that business is essentially done in the South, although it's expected that Northern trade will need to see some additional activity before the end of the day. This is likely to be pushed off until late afternoon or early evening with a wide gap still between asking prices and bids. According to the closing report, the national hog base is $0.10 higher compared with the Prior Day settlement ($52-$59.75, weighted average $59.05). Corn futures were steady to lower in light activity. The May futures contract was 3/4 cent lower Friday. The Dow Jones Index closed 364 points higher with the Nasdaq up 130 points.

LIVE CATTLE

Live cattle futures traded in a mixed, moderate range through much of the session, but closed $0.12 to $0.60 lower as buying interest remained undeveloped due to the sluggish trade activity. Nearby contracts posted the most significant losses with prices in summer and fall contracts slipping 45 to 60 cents per cwt due, in most part, to very sluggish trade volume. The strong triple-digit rally that pushed markets higher Thursday seemed to quickly run out of gas as traders became more interested in squaring positions at the end of the week than with any fundamental or technical market moves. Prices remain well within the recent trading range with no indication that traders will break out of this rut anytime soon. Beef cut-outs: higher, up $0.32 (select, $209.49) to up $0.74 (choice, $228.30) with light demand and light-to-moderate offerings (61 loads of choice cuts, 26 loads of select cuts, 14 load of trimmings, 14 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady. Monday's cash market activity is expected to remain sluggish with the normal inventory-taking and showlist distribution taking place. There will be increased focus on the amount of cattle sold on the exchange, which may add some uncertainty over the next few days.

FEEDER CATTLE:

Light pressure developed late in the week with limited trade seen through the entire session. Futures ended steady to $0.40 lower. Following the strong triple-digit gains that flooded the market Thursday, traders seemed to be less focused on follow-through market support and more interested in squaring positions before the weekend. Trade volume appeared to be extremely weak, which may add even more uncertainty to the complex over the near future. May contracts settled at $140.40 per cwt, after a 40-cent loss with traders looking for some additional direction. CME cash feeder index for 5/3 is $137.90, down $0.21.

LEAN HOGS:

Limited overall interest was seen in lean hog futures Friday as prices bounced back and forth in a narrow-to-moderate range. Futures ended $0.20 lower to $0.37 higher Friday. The overall lack of firm market moves through the complex is likely to be add some additional uncertainty through the weekend. Firm gains were seen through most of the trading session Friday, although there is uncertainty as to much how much additional pressure will be seen as the market remains near recent lows. Traders continue to focus on strong pork and hog supplies through most of the summer, which may limit longer-term buying and cause prices to hover in their current range. Pork prices slipped lower following mixed trade activity in primal markets late in the week. Strong support in butt and rib markets was offset by pressure in picnic and belly cuts. Pork cut-out: $69.29, down 0.10. CME cash lean index for 5/2: $62.93, up $0.25. DTN Projected Lean Index for 5/1: $62.66, up $0.21.

MONDAY'S CASH HOG CALL:

Steady to $1 higher. Early activity next week is not expected to deviate much from recent cash market activity. Initial morning bids are expected to be seen steady to $1 per cwt higher with most bids steady to firm. Total slaughter numbers Monday are expected to be 465,000 head.