Friday Closing Livestock Market Summary - Late-Week Profit-Taking Pressures Lean Hog Futures

GENERAL COMMENTS

Despite a general lack of trade volume through Thursday, cash business remains slow in developing Friday. The best market test appears to be in parts of the North. Specifically, Nebraska has marked several thousand steers and heifers at $122 to $123, generally $2 to $3 lower than last week. The South remains at a standstill as of this writing, but it is possible that buyers and sellers will find some level of compromise before the sun sets. The National hog base closed up $0.97 compared with the Prior Day settlement ($59-$63.50, weighted average $62.62). From Friday to Friday, livestock futures scored the following changes: Jun LC up $1.57; Aug LC off $0.65; May FC off $1.98; Aug FC off $2.42; Jun LH up $1.58; Jul LH up $1.40. Corn futures closed over 5 cents lower, pressured by some reports of rainfall in Brazil and general U.S. planting progress. The stock market closed mostly higher with the Dow advancing by 91 points. The Nasdaq closed 2 point lower.

LIVE CATTLE

Futures closed modestly higher, up 22 to off 5. Contracts spent most of the session moderately lower thanks to uncertain cash potential and fears that beef cutouts were close to a seasonal top. However, late-session short-covering pushed most months back into the green. Having said all that, bulls accomplished little this week in terms of filling deep board discounts. Clearly, many traders remain fearful of larger beef supplies in the last half of the second-quarter. Beef cutouts: steady to weak (choice, $230.97, off $0.10; select $208.69, off $0.45) on light-to-moderate demand and offerings (47 loads of choice cuts, 25 loads of select cuts, 15 loads of trimmings, 19 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady to $2 lower. Activity on Monday will be limited to the distribution of new showlists. While the lack of cash business so far Friday makes it tough to estimate next week's offering, our guess is that ready numbers will be steady to somewhat larger.

FEEDER CATTLE:

Futures closed mostly modestly lower, off 67 to up 45. Like their counterparts in the live trade, feeders benefitted from late-session buying. Nevertheless, most contracts finished in the red, apparently oblivious to any help stemming from lower corn prices. CME cash feeder index: 05/10: $137.21, off $0.72.

LEAN HOGS:

Futures closed moderately to sharply lower, off 2 to 222. Spot May is scheduled to expire on Monday. That means that June stands to take the lead position more than $10 over the cash index. While students of the seasonal trend fully expect fundamentals to improve over the next 30-45 days, many wonder if the good news is already priced into the early summer board premium. Indeed, such uncertainty was probably responsible for today's sharp sell-off in June through August. Pork cutout: $73.47 (FOB Plant) up $0.89. CME cash lean 05/09: $63.73, up $0.18 (DTN Projected lean index for 05/10: $64.06, up $0.33.

MONDAY'S CASH HOG CALL:

$1 higher. Hog buyers should start out next week expecting to spend more on live inventory. Positively, country supplies of ready barrows and gilts seem to be shrinking. At the same time, the pork carcass value appears to be growing.