Friday Closing Livestock Market Summary - Cattle, Hog Futures Close Week With Bullish Confidence

GENERAL COMMENTS

Bullish-minded feedlot managers successfully outwaited short-bought packers Friday, generating sharply higher country business and trade volume in the process. Most steers and heifers in the South were marked at $115 on a live basis, roughly $5 higher than last week. On the other hand, most dressed deals in the North were tagged at $183-184, $6-$7 higher than weighted averages reported last week. According to the closing report, the national hog base is $1.07 higher ($70-$79, weighted average $76.48). Corn futures closed a penny plus higher on rather uninspired late-week short-covering and profit-taking. The stock market closed higher with the Dow up 75 points and the Nasdaq better by 10.

LIVE CATTLE

Spurred by more and more evidence Friday morning that cattle buyers would ultimately be forced to respect higher feedlot asking prices, live futures worked higher through the session and closed with impressive gains (i.e., up mostly 25 to 165). June through August led the late-week charge with triple-digit progress. Spot June close over 110 for the first time since March 19. It's also worth noting that June closed above the 100-day moving average for the first time since Feb. 27. Beef cut-outs: lower, off $0.20 (choice: $226.21) to $0.23 (select: $203.18) with moderate demand and offerings (45 loads of choice cuts, 33 loads of select cuts, 13 loads of trimmings, 25 loads of ground beef).

MONDAY'S CASH CATTLE CALL:

Steady to $2 higher. Look for typically slow action on Monday with buyers solely interested in assessing the size of the new fed offering. We expect showlists to be about steady.

FEEDER CATTLE:

Although feeders lagged behind their live counterparts by a step or two, late-week buying was encouraging here as well. Spot August closed the week above both its 100-day moving average and 50% retracement of the first-quarter sell-off. Furthermore, August is very close to confirming a double bottom, needing a close above the May 31 high of $149.50. 06/07: $140.49, up $0.84.

LEAN HOGS:

Pumped by steadily improving fundamentals and bull-spreading, lean hog futures closed generally 22 to 147 higher. Soon-to-expire spot June notched its highest close since March 6. July settled above 80 for the first time since April 20. The carcass value closed moderately higher as strength in loins, ribs and processing primals overshadowed butt and picnic weakness. Pork cut-out: $79.03, up $0.79. CME cash lean index for 06/06: $73.50, up $1.00 (DTN Projected lean index for 06/07: $74.57, up $1.07).

MONDAY'S CASH HOG CALL:

$1-$2 higher. The ready hog supply will tighten further next week, forcing buyers to stay close to ATM machines.