Friday Closing Livestock Market Summary

GENERAL COMMENTS

Although the cash cattle trade seemed quiet throughout Friday, mandatory price reporting identified light volume in several areas. Several thousand traded in Nebraska at mostly $200.00 -- an amazing $18.00-$19.00 lower than last week's weighted average. Furthermore, Kansas reported some business at $127.00, $10.00 lower than last week's weighted average. The National hog base closed up $0.75 compared with the Prior Day settlement ($79.00-$86.00, weighted average $84.72). From Friday to Friday livestock futures scored the following changes: Jun LC Off $9.55; Aug LC Off $5.68; Aug FC Off $6.30; Sep FC Off $6.27; Jul LH Off $0.38; Aug LH Off $2.93. Corn futures closed roughly four cents higher in relatively light trade volume. The stock market closed mixed with the Dow off 24 and the NASDAQ off 13.

LIVE CATTLE

Futures closed mostly higher, up 67 to off 80. Spot June continued to erode, pressured by another round of lower packer bids in the country. Indeed, June seemed intent to test the lows of May despite the still premium status of the cash market. Needless to say, it has been an ugly week in the live market with long-liquidation and eroding cash causing contracts to fall into a price territory not seen since late May. Friday's token rally was nothing more than a dead-cat bounce. Beef cut-outs: steady to weak (Choice, $249.84 up $0.10, Select $219.80 off $0.73) on moderate demand and offerings (46 loads of choice cuts, 22 loads of select cuts, 14 loads of trimmings, 19 loads of coarse grinds).

     

MONDAY'S CASH CATTLE CALL:

Steady to $2.00 lower. Monday's activity will be limited to the distribution of new showlists. We expect ready numbers to be somewhat larger thanks to unsold cattle carried over as well as a growing number of fed calves ready for market. While feedlots would like to plant their feet, such an effort may first require the stabilization of futures.

FEEDER CATTLE

Futures closed higher, up 42-97. Like their live counterparts, feeders bounced higher thanks to late-week short-covering. In other words, bears called off the dogs long enough to take some profits before adjourning for the weekend. CME cash feeder index: 06/15: $151.07, off $1.66.

LEAN HOGS

Futures closed mixed up 140 to off 80. Although Friday's settlement looked rather uneventful, most contracts did manage to rally a good deal off early session lows. Bull-spreading seemed popular in the early going, but late profit-taking caused the price structure to level out a good deal. Note that spot July will start next week significantly below the most recent cash index. Such a reality will probably cause bull-spreading to be popular when trading resumes on Monday. Pork cut-out: $95.63 (FOB Plant) up $0.73. CME cash lean 06/14: $82.93, up $0.83 (DTN Projected lean index for 06/15: $84.06, up $1.13).

 

MONDAY'S CASH HOG CALL

$1.00-$2.00 higher. Look for the cash trade to open solidly higher on Monday, supported by tightening ready numbers and good processing margins.