Friday Closing Livestock Market Summary - Live Cattle Futures Surge Higher

GENERAL COMMENTS

From Friday to Friday livestock futures scored the following changes: Oct LC, up $3.85; Dec LC, up $3.63; Sep FC, up $4.45; Oct FC, up $5.92; Oct LH, up $0.57; Dec LH, off $0.15. Cash cattle trade has started to trickle through the market Friday afternoon, with a few deals inked at $172 per cwt. But, at this point, it seems packers and feeders remain at a standstill and may not post active trade until late afternoon or early evening. Bids have improved due to the sharp rally in futures with live bids at $108 to $109 per cwt and dressed bids at $170 to $172 per cwt. Asking prices are also increasing, at $177 and higher dressed basis, and $112 to $114 per cwt live. According to the closing report, the national hog base is $0.30 lower compared with the prior day settlement ($44.00-$50.00) weighted average $48.96. Corn futures are lower in light activity. September futures were 3/4 cent Lower Wednesday. Dow Jones Index is 4 points lower with Nasdaq down 2 points.

LIVE CATTLE

Limit gains developed in October live cattle futures as commercial buyer support moved back into the complex ($0.60 to $3.00 higher). Sharp underlying support moved back into the entire cattle market with prices quickly surpassing short-term resistance levels of $112 per cwt early Friday morning. Despite the limited trade in most commodity markets, prices remained unchecked with October futures surging to $113.80 per cwt after posting daily limit gains of $3 per cwt. Beef cut-outs: mixed, $0.77 lower (select, $196.47) and up $0.23 (choice, $204.27) with light demand and offerings (66 loads of choice cuts, 19 loads of select cuts, 5 load of trimmings, 15 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady. Early week trade is not expected with inventory taking and showlist distribution the main focus through the complex.

FEEDER CATTLE:

Strong triple-digit gains developed late in the week ($1.77 to $3.47 higher). The aggressive move higher in live cattle futures as prices have broken out of the long-trending sideways action has sparked widespread buyer activity through the entire complex. This may add even more support early next week with more volume moving back to all commodity markets. CME cash feeder index for 9/12 is $152.71 up $0.11.

LEAN HOGS:

Firm gains developed through the lean hog complex. There has been increased support through the entire livestock trade Friday (0.10 lower to $0.72 higher). Continued firm market support in cash trade as well as underlying aggressive support trickling into the complex from the cattle market has sparked increased overall support in nearby contracts. This may add even more support to the complex as traders look for more activity late in the month. Pork values have surged higher Friday afternoon with increased overall support developing across the primal market. Pork cutout values gained $3.48 per cwt, moving to $74.53 per cwt. CME cash lean index for 9/12 $50.08 up $1.59. DTN Projected lean index for 9/13 $51.85 up $1.77.

MONDAY'S CASH HOG CALL:

Steady to $1 higher. Firmness is expected to develop through the complex following additional gains in futures trade. There remains uncertainty as to how active the eastern pork plants will be early next week, following the storms. Monday runs are currently estimated at 425,000 head.