Friday Closing Livestock Market Update - Futures Close Mostly Lower but Cattle on Feed Report was Supportive

GENERAL COMMENTS

Friday's market closed with the same lower tones that it possessed throughout most of the week as traders are still leery about the U.S. economy and banking systems. However, cattlemen were thankful to see a supportive Cattle on Feed report shared Friday afternoon and now hope that it helps spur on stronger trade early next week. Hog prices closed lower on the Daily Direct Afternoon hog report, down $1.22 with a weighted average of $77.61 on 4,456 hogs. May corn closed up 1 1/2 at $6.343 and May soybean meal closed down $8.00 at $466. The Dow Jones Industrial Average is down 384.57 at 31,861.98.

From Friday to Friday, livestock futures scored the following changes: April live cattle down $1.95, June live cattle down $2.25; March feeder cattle down $2.63, April feeder cattle down $3.00; April lean hogs down $7.58, June lean hogs down $9.45; May corn up $0.17, July corn up $0.11.

LIVE CATTLE:

The live cattle complex closed similarly to that of the feeder cattle market as the nearby contracts suffered through the day's end, but the market's deferred contracts were able to close slightly higher. Friday afternoon's Cattle on Feed report was as supportive as it was expected to be with lighter on feed numbers and thin placements. The big question moving into Monday's market will be whether or not traders choose to trade its bullish findings. Regardless of what the futures complex opts to do, Friday's COF report was a good reminder to feedlots that supplies are thin and will only become thinner if demand remains this strong. No more cash cattle trade developed throughout Friday's market as feedlots opted to roll over their leftover showlists into next week. Throughout the week, live cattle have traded for $164, and dressed cattle have traded for $264, both of which are $1.00 lower than last week's weighted average. April live cattle closed $0.03 lower at $162.325, June live cattle closed $0.48 lower at $156.4 and August live cattle closed $0.18 lower at $156.40.

Friday's slaughter is estimated at 113,000 head, 1,000 head less than a week ago and 13,000 head more than a year ago. Saturday's slaughter is projected to be around 17,000 head. This week's estimated slaughter amounts to 631,000 head, 3,000 head less than a week ago and 5,000 head less than a year ago.

Boxed beef prices closed mixed: choice down $0.60 ($283.35) and select up $0.68 ($272.44) with a movement of 78.67 loads (40.34 loads of choice, 14.31 loads of select, 5.31 loads of trim and 18.71 loads of ground beef). Throughout the week choice cuts averaged $284.47 (down $2.01 from last week) and select cuts averaged $273.00 (down $2.93 from last week) and the week's total movement of cuts, grinds and trim totaled 501 loads.

MONDAY'S CATTLE CALL: $1.00 higher. Given that Friday's COF report highlighted the fact that market-ready supplies of cattle are thin and that cattle are not reentering the feedlot sector as aggressively as before in years past, feedlots should be able to advance the market by at least $1.00.

FEEDER CATTLE:

The feeder cattle complex closed mixed as the nearby contracts weren't able to shake the nervousness of Friday's market environment thanks to the uncertainty of some banking systems. However, the deferred contracts decided to look to the market's strong fundamentals and trade the fact that numbers are thin, and demand is strong, so prices should continue to trade higher until that relationship changes. March feeders closed $0.65 lower at $188.85, April feeders closed $0.50 lower at $194.65 and May feeders closed $0.33 lower at $199.95. The Oklahoma Weekly Cattle Auction Summary shared that, compared to last week, throughout the entire state, feeder steers traded steady to $1.00 higher. Feeder heifers traded steady to $3.00 higher. Steer calves sold steady while heifer calves sold steady to $1.00 higher. Slaughter cows continue to move higher as numbers become lighter. Slaughter cows traded $1.00 to $2.00 higher and slaughter bulls traded $1.00 to $3.00 stronger. Feeder cattle supply over 600 pounds was 56%. The CME Feeder Cattle Index for March 16: down $0.84, $187.87.

LEAN HOGS:

The lean hog complex received no additional support ahead of Friday's close. April lean hogs closed $0.43 higher at $79.875, June lean hogs closed $0.15 lower at $93.325 and July lean hogs closed $0.48 lower at $95.625. Unfortunately, pork cutout values also saw a steep regression with the belly being the biggest day over day problem as it fell $8.23 in and of itself. With very little fundamental support aiding the market along, the lean hog complex could be pressured again next week. Friday's hog slaughter is estimated at 472,000 head, 8,000 head less than a week ago and 1,000 head more than a year ago. Pork Cutouts totaled 245.54 loads with 217.14 loads of pork cuts and 28.40 loads of trim. Pork cutout values are down $3.54 at $80.95. The CME Lean Hog Index for March 15: up $0.02, $79.95.

MONDAY'S HOG CALL: Lower. Packers aren't overly aggressive in the cash hog market on Mondays and given the immense pressure that the complex faced this past week, it's unlikely that they treat this upcoming week much different.