Friday Closing Livestock Market Summary - Lean Hog Futures Close Mixed With Nearbys Gaining on Deferreds

GENERAL COMMENTS

Cattle buying activity in the North turned fairly active on Friday with most live sales marked at $111 (some cattle in the West were marked at $111.50). Such live business was generally $1.25 higher than last week's weighted average basis Nebraska. Northern dressed sales ranged from $177 to $178 (mostly $177), steady/firm with last week. The National hog base closed up $0.35 compared with the Prior Day settlement ($61 to $70.50, weighted average $69.14). From Friday to Friday, livestock futures scored the following changes: Jun LC up $0.25; Aug LC up $1.32; Aug FC up $1.40; Sep FC up $2.15; Jun LH up $3.40; Jul LH up $1.25. Corn futures closed generally 2 cents lower, pressured by positive crop ratings and some relief anticipated in terms of Brazilian dryness. Supported by the positive jobs report, the stock market closed solidly higher with the Dow up 219 and the Nasdaq better by 112.

LIVE CATTLE

Futures closed mostly lower, off 112 to up 2. Late-week action was generally slow with most traders apparently content to live with board discounts. Spot June did manage to close the week above its 40-day moving average, as did August. Yet summer months remain stuck in a lateral range dating back to early April. Furthermore, August seems to be contained by resistance at its 100-day moving average (i.e., $105.75). Beef cutouts: weak on choice and firm on select (choice, $227.53, off $0.67; select $204.80, up $0.33) on light-to-moderate demand and offerings (47 loads of choice cuts, 22 loads of select cuts, 22 loads of trimmings, 25 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady. Monday will be typically slow with cattle buyers focusing on the collection of new showlists. We expect ready numbers to be steady to somewhat larger.

FEEDER CATTLE:

Futures closed lower, off 27-107. Spot August received the most selling pressure, no doubt pulled lower by the large discount of the cash index. However, the August chart still looks promising in terms of a double bottom. Yet it will take a close over resistance at $48.50 before technicians get excited in that regard. CME cash feeder index: 05/31: $136.17, up $1.35.

LEAN HOGS:

Futures closed mixed, up 97 to off 85. Summer contracts were supported by bull-spreading interest and ideas of improving fundamentals over the next 30-60 days. Yet, for the moment, June through August appear to be trapped between 40-day moving averages and 100-day moving averages. Bullish potential will depend upon the rate of cash and product improvement over the next several weeks. Pork cutout: $76.32 (FOB Plant) off $1.90. CME cash lean 05/30: $69.63, up $0.13 (DTN Projected lean index for 05/31: $70.01, up $0.38.

MONDAY'S CASH HOG CALL:

Steady to $1 higher. Look for the cash hog trade to open with steady/firm bids on Monday, probably supported by further tightening in country supplies.