DTN Closing Livestock Comments

Closing Comments

The cash cattle trade was not tested Friday with bids and asking prices poorly defined. Most of the apathy was related to significant trade volume generated on Wednesday. Both sides apparently were satisfied with the volume traded earlier in the week. The national hog base closed off $0.47 compared with the Prior Day settlement ($50.00-$54.50, weighted average $53.41). From Friday to Friday, livestock futures scored the following changes: Apr LC Up $4.43; Jun LC up $2.00; May FC Up $0.85; Aug FC Up $1.98; Jun LH Off $4.18; Jul LH Off $4.10. Corn futures closed fractionally lower, slightly pressured by positive South American weather and a general lack of bullish news. The stock market settled lower with the Dow off 30 and the Nasdaq down by 6.

LIVE CATTLE

Futures closed mostly higher, up 35 to off 2. Friday's listless activity seemed to represent a break in bullish action. Nearby contracts surged significantly higher through the week, supported by further evidence of cash strength and ideas that seasonal demand was likely to stay decent for the next 30 days or so. The April 1 on-feed report turned out to be somewhat negative thanks to larger-than-expected March placement activity: April 1 on feed 100%; placed in March up 11%; and marketed in March up 10%. Beef cut-outs: firm to higher (choice, $217.16 up $1.44, select $203.89 up $0.32) on light-to-moderate demand and moderate offerings (35 loads of choice cuts, 26 loads of select cuts, 15 loads of trimmings, 13 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady to $2.00 higher. Monday will be typically quiet with packers focusing on the collection of new showlists. We expect the late-April offering to be steady to somewhat larger. Furthermore, feedlot managers will not hesitate in pricing cattle higher based upon their recent success (e.g. $134.00-$135.00 in the South).

FEEDER CATTLE

Futures closed mixed up 65 to off 50. Feeder futures also seemed to take the day off, cooling from sharply higher prices sustained through the first half of the week. Although new contract highs were not set Friday, we did see the record book get rewritten several times through the week as commercial buyers pushed feeders hard to keep up with their live counter parts. CME cash feeder index: 04/20: $138.05, up $0.40.

LEAN HOGS

Futures closed lower off 22 to 77. Coming in to the week, many speculators were hoping to see hints of a seasonal bottom in the lean hog trade, one possibly supported by smaller market hog receipts and better pork demand. But when little of the kind developed, new waves of long-liquidation began to roll. Summer contracts were unsuccessful in finding support in the low 70s with June and July closing well below prior support levels. Pork cut-out: $75.47 (FOB Plant) up $0.88. CME cash lean 04/19: $61.59, off $0.30 (DTN Projected lean index for 04/20: $61.10, off $0.49).

MONDAY'S CASH HOG CALL

Steady to $1.00 lower. Look for cash hog buyers to remain on the defensive when cash procurement resumes on Monday.

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

(CZ)

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