Friday Closing Livestock Market Summary - Feeder Cattle Futures Rally Late Friday

GENERAL COMMENTS

From Friday to Friday, livestock futures scored the following changes: Jun LC, up $2.25; Aug LC, up $4.08; Aug FC, up $7.30; Sep FC, up $6.65; Jun LH, off $0.50; Jul LH, up $0.30. Cash cattle trickled into some parts of the market through early afternoon Friday. Trade is seen in the North at $177 dressed basis and $110 live. Current prices are generally $6 per cwt below week ago levels. Bids are still seen at this time in the South at $110 per cwt, but no significant trade has yet developed. It is likely that some activity may be seen late afternoon or Friday evening, but trade volume may remain extremely light. The combination of reduced schedules next week, due to the Memorial Day holiday and previous sales in May sold for delayed delivery, may keep packers from aggressively sourcing cattle. This is still well below asking prices of $115 and higher in the South, and $182 to $185 in the North. At this point it appears that trade will be delayed until well into Friday. According to the closing report, the national hog base is $0.35 higher compared with the Prior Day settlement ($58.00 to $66.00) weighted average $65.07. The corn futures are higher in light activity. July futures were 1 3/4 cents higher Friday. The Dow Jones Index is 58 points lower with the Nasdaq up 9 points.

LIVE CATTLE

Firm gains developed late in the day following early mixed market activity ($0.25 to $0.65 higher). The ablity to bring buyer support back into the market given the light market activity and pre-holiday schedule is generally impressive. This may help spark some additional underlying support through the complex early next week. Total cattle on feed numbers is 105% ahead of year ago levels. However, the fact that overall marketings in the month is listed at $106% shows continued overall beef market demand growth through early 2018. Trade will remain closed until Tuesday, when the focus will move toward fundamental market activity through the last few days of May. Beef cut-outs: lower, $0.31 lower (select, $204.62) and down $1.57 (choice, $227.43) with moderate demand and offerings (47 loads of choice cuts, 27 loads of select cuts, 18 load of trimmings, 12 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL:

Steady with this week. Activity Tuesday is expected to remain sluggish, with packers and feeders not only trying to assess overall procurement needs and inventory, but also many are looking for initial indication as to how active beef demand developed over the holiday weekend. Activity is not expected to be seen until the second half of next week.

FEEDER CATTLE:

Strong triple-digit gains moved into the feeder cattle futures despite the lackluster interest early in the session ($1.10 to $1.62 Higher). Lower overall cattle placement numbers in the cattle on feed report, which was released earlier in the day Friday, pointed to the potential for less bearish market indicators in the near future. Total placements in April are listed at 92% year ago levels. August futures led the complex higher with a $1.62 per cwt rally, moving prices to $144.92 per cwt. The overall support through the complex continues to help to draw increased overall support through the entire market. CME cash feeder index for 5/25 is $135.94 up $1.50.

LEAN HOGS:

Sluggish market volume developed across the complex with traders holding early price shifts through most of the session ($0.62 lower to $0.77 Higher). Spot month June futures fell 62 cents per cwt, with increased overall support developing in the rest of the complex as prices were listed steady to 77 cents per cwt. Many traders have already exited the market for the week, in front of the long holiday weekend. This may bring some additional interest back to the table early next week. Pork prices bounced firmly higher following a strong move higher in Rib and Ham values. Rib prices led the market higher with a $5.27 per cwt gain, although most of this move is associated with markets rebounding from the oversold losses of $20 per cwt Thursday. Pork cut-out: $75.60 up $1.49. CME cash lean index for 5/23 $69.72 up $0.69. DTN Projected lean index for 5/25 $69.44 down $0.28.

TUESDAY'S CASH HOG CALL:

Steady to 50 cents higher. Limited activity is expected to be seen early next week, with little market change seen over the next few days. Cash bids are expected to remain mostly steady as traders assess overall market direction and step into a short week of plant runs. Tuesday runs are expected to be seen near 464,000 head.