GENERAL COMMENTS:
Light trade developed Friday with mixed direction seen through the end of the session. Feeder cattle futures were heavily affected by early gains in the corn trade, although the pressure continued despite steady late-day corn markets. End-of-the-week positioning was evident through the last half of the day with all contracts pulling away from early highs. From Friday to Friday, livestock futures scored the following changes: Aug LC up $0.40; Oct LC off $1.08; Aug FC off $0.72; Sep FC up $0.23; Aug LH up $2.75; Oct LH up $1.25. Cash cattle trade remains at a standoff as of midafternoon Friday with just a few sales reported at $113 live basis in Nebraska and Colorado. Limited bids are seen in the South with bids of $179 to $180 holding in the North on a dressed basis. It is likely to be late afternoon or early evening before additional cash cattle trade develops, but it is still expected packers will need to buy some cattle before the end of the week. Asking prices are holding at $112 to $113 live in the South and $183 and higher in the North. The National Daily Direct afternoon hog report was $0.79 lower ($62 to $77 per cwt, weighted average $70.98) on 8,331 head sold. Corn futures are mixed in light trade with September down 3/4 cent. Stock markets were also mixed in light trade with the Dow up 22 points and the NASDAQ down 43 points.
LIVE CATTLE: Futures settled $0.10 higher to $0.32 lower. Despite the limited movement Friday, nearby live cattle futures were able to defend short-term support levels at the end of the week. The October contract closed unchanged at $106.75 per cwt with limited movement in all nearby trade. Pressure in feeder cattle trade spilled over to the live cattle market, with softness the most pronounced in deferred trade. Beef cut-outs: mixed, up $1.44 (select, $193.81) to down $0.51 (choice, $216.37) with light-to-moderate demand and offerings, 100 loads (48 loads of choice cuts, 23 loads of select cuts, 11 loads of trimmings, 19 loads of coarse grinds).
MONDAY'S CASH CATTLE CALL: Steady. Cash markets are expected to be quiet Monday with any activity limited to showlist distribution and inventory-taking. These numbers may shift from normal recent levels given the lack of active trade earlier in the week.
FEEDER CATTLE: Futures closed $0.95 to $1.42 lower. Triple-digit losses developed at closing bell Friday as traders remained defensive throughout the session. Early grain market gains sparked the initial softness, but feeder cattle traders are also extremely cautious ahead of Monday's USDA crop reports. This will be the best assessment of corn acres planted and should give a better indication of production potential this year. The report could shift the direction of grain trade. There appears to be more upside corn market risk as more information becomes available, which would be bearish for feeder cattle trade. CME cash feeder index for 8/7 is $141.86, up $0.25.
LEAN HOGS: Futures settled $0.57 lower to $1.25 higher. Triple digit gains continued to develop in deferred contracts with spring and summer 2020 contracts leading the market higher. Traders continue to focus on long-term support rebuilding through the complex. October and December contracts shifted lower as traders covered positions at the end of the week. Pork values were up by triple digits on aggressive gains in ham and belly cuts. Pork cutout values added $1.75 per cwt, moving to $90.44 per cwt, on 304 loads. CME cash lean index for 8/7 is $82.85, down $0.58. DTN Projected lean index for 8/8 is $82.33, down $0.52.
MONDAY'S CASH HOG CALL: Steady to $2 lower. Further pressure is expected in cash trade as packers continue to work through the recent futures pressure and uncertainty in wholesale pork values. Most bids are expected steady to $1 per cwt lower. Monday slaughter numbers are expected at 475,000 head.
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