DTN Closing Livestock Comments

Closing Comments

Moderate to fairly active cattle business developed in most feeding areas Thursday. Short-bought packers were forced to cover immediate slaughter needs. Live sales in the South were marked at $128.00, $2.00 higher than last week. Dressed business in the North ranged from $200.00-$208.00 with most of the spot business marked at $206.00-$207.00 (generally $6.00-$7.00 higher than the heart of last week's business). The national hog base closed off $0.17 compared with the Prior Day settlement ($51.00-$57.00, weighted average $56.36). From Friday to Friday livestock futures scored the following changes: Apr LC Up $5.32; Jun LC up $2.90; May FC Up $4.53; Aug FC Up $4.62; Apr LH Off $0.87; May LH Off $0.70. Corn futures closed 2 cents higher with buying interest tied to commercial concerns and some talk tied to possible planting delays caused by wet forecasts. The stock market closed lower with the Dow off 138 and the NASDAQ lower by 31.

LIVE CATTLE

Futures closed higher up 32-117. Solid gains were scored here again thanks to greater feedlot spending and technical buying. Note that June through December once again scored new contract highs. Also note that June closed at $114.70 as much at $14.00-$16.00 below spot cash (i.e. a historically large discount). Beef cut-outs: steady to firm (Choice, $210.67 up $0.54, Select $198.76 up $0.12) on light to moderate offerings (53 loads of choice cuts, 26 loads of select cuts, 06 loads of trimmings, 21 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady to $2.00 higher. Monday's trade will be typically slow with packers exclusively focusing on the distribution of new showlists. We expect ready numbers to be about steady with this week. On the other hand, improving psychology should encourage beef producers to price ready numbers at least $2.00 higher on a live basis.

FEEDER CATTLE

Futures closed mostly moderately higher up 20-177. After setting new contract highs for three consecutive sessions, buying energy in the feeder market cooled a bit right before the holiday break. Nevertheless, contracts still closed moderately higher supported by commercial buying and spillover support from the live trade. CME cash feeder index: 04/12: $134.21, up $0.36.

LEAN HOGS

Futures closed modestly higher up 7-60. Late-week action in this market was rather lackluster. While some summer traders are hopeful that the board is close to a seasonal bottom, confidence is not adequate enough to spark significant buying interest. Spot April is scheduled to expire on Monday, but is still expecting the cash index to erode at least a dollar more. Pork cut-out: $75.15 (FOB Plant) up $0.42. CME cash lean 04/11: $64.16, off $0.49 (DTN Projected lean index for 04/12: $63.68, off $0.48).

MONDAY'S CASH HOG CALL

Steady. The cash hog trade should start to stabilize as we move into the second half of April.

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

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