DTN Closing Livestock Comments

Closing Comments

The cash cattle trade remains untested as of this writing, despite the fact that week-to-date trade volume is very light in most areas. Asking prices remain firm at $128.00-plus in the South, and $205.00-plus in the North. We've seen a little improvement in buying interest Friday afternoon with some Southern packers now bidding as high as $125.00. Yet it remains to be seen if significant trade volume can still develop over the next several hours. The national hog base closed off $0.88 compared with the prior day settlement ($54.00-$60.00, weighted average $58.17). From Friday to Friday, livestock futures scored the following changes: Apr LC Up $0.10; Jun LC up $0.93; May FC Up $1.17; Aug FC Up $1.90; Apr LH Off $2.35; May LH Off $0.85. Corn futures closed about one penny lower in lackluster trading. The stock market closed modestly lower with the Dow off 6 and the Nasdaq down by 1.

LIVE CATTLE

Futures closed sharply higher up 107-167. Impressively, Friday's rally was enough to offset sharp losses suffered by futures earlier in the week. Most contracts managed to find renewed buying interest above the 40-day moving average. Yet even if late-week feedlot business surfaces near steady money, spot April will still be $7.00 below the country trade. Beef cut-outs: Weak on choice and sharply lower on select (choice, $207.22 off $0.68, select $197.49 off $2.79) on light-to-moderate demand and moderate-to-heavy offerings (83 loads of choice cuts, 31 loads of select cuts, 15 loads of trimmings, 27 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady to $2.00 lower. This call is based upon the assumption that this week's cash average will hold about steady. Needless to say, that assumption could change over the next several hours. Having said that, Monday's activity will be limited to the distribution of new showlists. Furthermore, the cash market moving forward will be challenged by larger ready supplies and struggling beef cutouts.

FEEDER CATTLE

Futures closed sharply higher up 160-212. Feeder cattle were well supported by spillover bullishness from the live market. Additionally, the market seemed to be well supported by commercial buying and the premium status of the cash index. CME cash feeder index: 04/06: $132.96, off $0.25.

LEAN HOGS

Futures closed mixed off 92 to up 55. The persistence of plentiful market supplies worked to pressure the front end of the board. April is set to expire at the end of next week, but seems to be in no hurry to rally toward the cash index. While fundamentals are expected to turn more positive later this spring, supply and demand factors could remain challenging for another two to four weeks. Pork cut-out: $75.28 (FOB Plant) up $1.17. CME cash lean 04/05: $66.15, off $0.45 (DTN Projected lean index for 04/06: $65.73, off $0.42).

MONDAY'S CASH HOG CALL

Steady to $1.00 lower. Hog buyers are expected to resume activity on Monday with steady to lower bids. Understandably, packers will be assuming that the country offering will remain quite generous, at least through the balance of the month.

For more from John see http://www.feelofthemarket.com/…

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