Cash cattle trade wrapped up for the week after strong buying Thursday. The jump in the cash market and surge in futures trade was impressive at the end of the month, but begs the question if further support can redevelop and be sustained during May. Feedlot managers will enter next week as bullish as they have been over the last several months, which will likely lead to additional aggressive asking prices with little room for movement early in the week. According to the closing report, the national hog base is $0.75 higher compared with the Prior Day settlement ($51.00-$59.00, weighted average $56.21). The corn trade turned lower in light activity on Friday. May futures posted a 4-cent loss. The Dow Jones Index is 39 points lower with the Nasdaq up 2 points.
Live cattle futures surged higher near closing bell after being unable to draw significant interest during most of the trading session. Late-day trade pushed prices to triple-digit gains, $1.57 to $2.50 higher. June futures led the complex with a $2.50 per cwt rally, moving to $124.02 per cwt. The June contract will take over as front-month futures Monday morning. April futures expired at $138 per cwt. The overall aggressiveness of the market at the end of April is expected to carry over into early May, but the weekend break could change traders' attitudes. Beef cut-outs: higher, $1.00 higher (select, $207.68) to up 2.63 (choice, $221.78) with good demand and light offerings (58 loads of choice cuts, 31 loads of select cuts, five loads of trimmings, 36 loads of coarse grinds).
MONDAY'S CASH CATTLE CALL:
Steady. Following the sharply higher futures trade seen this week and higher cash trade which developed Thursday, activity is likely to remain sluggish early in the week. Monday will be reserved for showlist distribution and inventory taking as packers and feed yard managers focus on the overall amount of cattle sold through the last week of April.
Feeder cattle futures closed sharply higher in light trade after trading mixed in a narrow range through much of the morning. Contracts moved higher in the last hour of trade with very little resistance, closing $2.27 to $4.35 higher. This solidified August through November feeder cattle futures above $150 per cwt as traders continue to focus on the potential for supply tightness and renewed market support through the summer. The strong open interest developing in both live and feeder cattle futures during the last several weeks may help draw additional interest into the complex within the next several weeks, although the aggressive upward momentum in the market is also creating concern that a market correction may develop within the near future. CME cash feeder index: 4/27: $141.38, up $0.52.
Lean hog futures turned higher Friday, despite sluggish early trade, closing up $0.07 to $1.27. Strong end-of-session buyer support redeveloped in nearby contracts as triple-digit gains were seen in June through August futures. June contracts settled at $74 per cwt, matching the April 11 high resistance level, as traders focused on the potential for follow-through buying to develop through early May. The expectation is that the recent rally and current price levels will spark follow-through commercial interest in nearby and deferred contracts. Carcass values are firmly higher. Double-digit losses in ribs and bellies were countered by aggressive gains in butts and hams and narrow gains in other primals. Pork cut-out: $74.46 up $0.81. CME cash lean index for 4/26: $59.71, down $0.12. DTN Projected lean index for 4/27: $59.64, down $0.07.
MONDAY'S CASH HOG CALL
Steady to $1 higher. Continued firmness in the market is expected to spillover into early May with follow-through buying likely to develop Monday morning. Packers should start out with most bids steady to firm, although the full range of bids are likely to be steady to $1 higher. Slaughter is expected to be 442,000 head Monday.