GENERAL COMMENTS:
Light-to-moderate buying interest led to gains in lean hog and feeder cattle futures Friday. The gains in lean hog futures came after Thursday's correction. The rally in feeder cattle futures was due to traders focusing on falling grain prices, which could lead to lower production costs. From Friday to Friday, livestock futures scored the following changes: Aug live cattle up $1.05; Oct live cattle up $1.40; Aug feeder cattle up $3.75; Sep feeder cattle up $4.30; Aug lean hogs up $2.55; and Oct lean hogs up $0.53. Cash cattle remained untraded by midafternoon Friday, although bids had improved in most areas. Southern live bids were at $111 per cwt, while Northern live bids were at $109 to $111. Dressed bids remained at $180 to $183 per cwt. Asking prices remained firm at $113 to $114 live and $186 to $187 dressed. Light-to-moderate trade was expected to develop before the weekend, but it could be late afternoon or early evening before deals are reached. The National Daily Direct afternoon hog report was unavailable at the time these comments were posted. Corn futures moved lower in sluggish trade with September down 4 cents per bushel. The Dow Jones Index was 36 points higher with the NASDAQ up 94 points.
LIVE CATTLE: Limited trade volume kept prices stuck in a narrowly mixed pattern. Futures closed $0.05 lower to $0.12 higher. August and October contracts closed unchanged, as traders remain focused on long-term support. But the lack of direction in cash or beef values is limiting additional buyer interest at this point. Additional support may slowly trickle into the complex, but given the moves over the last week, prices could continue in the sideways trading pattern. Noncommercial traders could lose interest over the next few weeks if they are unable to move prices more than a few pennies. This could leave livestock trade stable, but limited volume could hinder further long-term support. Beef cut-outs: lower, down $0.84 (select, $188.34) to down $0.40 (choice, $212.17) with light demand and moderate offerings, 98 loads (34 loads of choice cuts, 29 loads of select cuts, 12 loads of trimmings, 23 loads of coarse grinds).
MONDAY'S CASH CATTLE CALL: Steady. Activity Monday is expected to remain quiet given that cash trade develops later Friday evening. Showlist distribution and inventory-taking will likely be the extent of early week activity.
FEEDER CATTLE: Weaker grain prices led to late-day support in feeder cattle with futures settling $0.17 to $0.92 higher. The support Friday helped contracts break through short-term resistance levels set in early July. This pushed prices to two-month highs with the potential for additional underlying support to be seen early next week. CME cash feeder index for 7/24 is $137.42, up $0.71.
LEAN HOGS: Active buyer interest moved back into the lean hog market Friday following aggressive triple-digit losses Thursday. Futures closed $0.30 to $1.40 higher. With lean hog prices shifting direction in a wild market swing over the past week, end-of-the-week buying activity helped to confirm the bullish market tone and bring additional buyers back into the complex. Pork values continued to show limited support in light trade Friday. Pork cutout values added $0.50 per cwt, moving to $84.38 per cwt, on 200 loads. CME cash lean index for 7/24 is $77.23, up $1.65. DTN Projected lean index for 7/25 is $78.86, up $1.63.
MONDAY'S CASH HOG CALL: Steady to $2 higher. Follow-through gains are expected early in the week. Although packers are starting to focus on reducing spending, plant output has not been affected at this point. Most bids are expected $1 per cwt higher early Monday morning. Monday slaughter numbers are expected at 475,000 head.
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