Friday Closing Livestock Market Summary - Lean Hog Futures Close Defensive Week With New Lows

GENERAL COMMENTS

It appeared that no one wanted to trade cattle this week. Trade volume for the week was extremely light, but we were still waiting for the possibility of light-to-moderate trade to develop late Friday afternoon if one or both sides finally agreed to compromise. Nevertheless, at this late hour, bids and asking prices remained separated by as much as $5 on a live basis. The National hog base closed off $1.22 compared with the Prior Day settlement ($59-$65, weighted average $62.50). From Friday to Friday, livestock futures scored the following changes: Aug LC off $0.30; Oct LC up $0.22; Aug FC off $1.37; Sep FC off $2.38; Aug LH off $2.80; Oct LH off $0.40. Corn futures closed fractionally higher, capping a generally positive week. Next week's weather map doesn't seem especially threatening, but of course forecasts are subject to change. The stock market closed lower with the Dow off 20.76 and the Nasdaq down by 114.

LIVE CATTLE

Futures closed mixed, up 110 to off 27. Late-week action was relatively choppy as traders carefully monitored the country for signs of cash action. At this time, it looks like spot August will start out next week anywhere between $2 and $7 below feedlot cash. In other words, much will depend upon the next step in fed cattle business. Beef cutouts: steady (choice, $205.14, up $0.23; select $198.27, unchanged) on moderate demand and moderate offerings (54 loads of choice cuts, 14 loads of select cuts, 13 loads of trimmings, 14 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady. Needless to say, it is tough to call next week's trade when we are not sure where prices will land late this week. Whatever the outcome, activity will probably be limited to the collection of new showlists. If we don't sell any cattle late Friday and/or Saturday, Monday's offering should be larger thanks to unsold cattle carried over.

FEEDER CATTLE:

Futures closed mixed, up 87 to off 62. The mixed trade in feeders obviously copied the indecision and confusion implied by the lack of feedlot business and the uneven trading in the live market. Through much of the week, nearby feeders have been supported by general appreciation of the cash index. CME cash feeder index: 07/26: $149.57, up $0.36.

LEAN HOGS:

Futures closed mostly lower, off 137 to up 27. Bearish fundamentals continued to pressure nearby issues. Indeed, spot August and October once again set new contract lows. This week's weekly slaughter total was only 1,987,000, checked by chain speed problems at Marshalltown and planned down time at most Smithfield plants. It seems like a good bet that next week's kill will be significantly larger. Pork cutout: $76.97 (FOB Plant) up $1.32. CME cash lean 07/25: $74.73, off $0.80 (DTN Projected lean index for 07/26: $73.46, off $0.97.

MONDAY'S CASH HOG CALL:

Steady to $1 lower. Expect hog buyers to resume defensive work on Monday, mindful of plentiful supplies and shaky pork demand.