Friday Closing Livestock Market Summary - Cattle Futures Cap Solid Recovery Week With Triple-Digit Gains

GENERAL COMMENTS

Light to moderate trade volume developed late in parts of the Northern tier of cattle feeding country. Most live and dressed sales seemed near steady with last week i.e., $105/$165). We're still waiting for signs of life in the South where bids and asking prices remain separated by as much as $5-$6. According to the closing report, the national hog base is $1.37 lower ($54.00-$60.00, weighted average $58.65). The corn trade closed generally 1-2 cents higher, somewhat supported by no hints of frost in the 7-day forecast. The stock market closed mixed with the Dow up 13 points and the Nasdaq off 57.

LIVE CATTLE

Despite a lack of positive input from the cash area, live futures closed sharply higher, up 90 to 172. Spot October finished at the very top of a lateral trading range dating back to early August. More impressively, December closed the week above its 40-day moving average for the first time since August 3. Furthermore, both Feb and April settled well their 100-day moving averages. Beef cut-outs: moderately lower, off $.19 (select, $189.97) to $.25 (choice, $191.88) with light to moderate demand and heavy offerings (84 loads of choice cuts, 35 loads of select cuts, 8 loads of trimmings, 25 loads of ground beef).

MONDAY'S CASH CATTLE CALL:

Steady. It will be interesting to check trade volume summaries early next week. At this time, country movement looks quite limited which could result in larger showlists next week. On the other hand, board premiums will no doubt encourage feedlot manager to price ready steers and heifers higher. At any rate, Monday's activity will probably be limited to the distribution of new showlists.

FEEDER CATTLE:

Feeders shot higher today, supported by stronger deferred live issues, promises of relatively cheap feed in the year ahead, and the premium of the cash index. October and November exited the week with a flurry of technical strength, closing well above 100-day moving averages. CME cash feeder index: 09/07: 148.24, up 1.19.

LEAN HOGS:

Lean issues settled moderately higher, up 10 to 70. The late week bounce seemed to be essentially tied to profit taking. This market exploded higher on Tuesday, but didn't manage to defend that advance past midweek. For example, spot October has closed about 230 below Tuesday's high. The chart gap created on Thursday between $63.05 and $63.55 could be tough overhead resistance when trading resumes next week. Carcass value continued to slip lower with higher loin and ham sales overshadowed by significant weakness in the belly, butt, rib and picnic primals. Pork cut-out: $82.12, off $.79. CME cash lean index for 09/06: 69.37, off .96 (DTN Projected lean index for 09/07: 68.94, off .43).

MONDAY'S CASH HOG CALL:

$1-$2 lower. Look for hog buyers to once again be on the defensive when procurement chores resume on Monday.