DTN Closing Livestock Comments

Closing Comments

Cash cattle trade developed Thursday as aggressive futures buying pushed prices sharply higher. Northern trade developed at $215 to $219 during the afternoon, $6 to $11 per cwt higher than last week's price levels. Southern trade was noted at $135 to $138. Prices are currently $4 to $7 higher than last week's average. Although there could be some additional business done Friday, the tone is likely to be set for the week, although asking prices surged at the end of the day. Asking prices are currently at $138 to $140 live and $220 dressed. According to the closing report, the national hog base is $1.01 higher compared with the Prior Day settlement ($50.00-$58.00, weighted average $55.48). The corn trade bounced higher in light activity. May futures posted a 3-cent gain Thursday. The Dow Jones Index is 6 points higher with the Nasdaq up 23 points.

LIVE CATTLE

Sharp gains developed during late-day trade with most contracts locked at the daily trading limit of $3 per cwt (full range $2.95 to $3.57 higher). April live cattle futures expired Thursday at a contract high of $135.60 per cwt after a 3.57 per cwt rally. April is in delivery so daily trading limits do not apply. With other nearby futures holding limit gains, expanded limits will be seen Friday morning. This will allow additional volatility through the end of the week. With futures already at contract highs, this could create additional technical signals for both weekly and monthly charts given the wide market shifts possible Friday. Beef cut-outs: mixed, $0.96 higher (select, $209.15) to down 0.03 (choice, $219.15) with moderate to good demand and heavy offerings (41 loads of choice cuts, 24 loads of select cuts, 20 loads of trimmings, 19 loads of coarse grinds).

FRIDAY'S CASH CATTLE CALL:

$5 to $10 higher from last week's levels, fueled by limit-higher futures trade. By the end of Thursday, most business may be done for the week, which could leave Friday activity quiet, with just some clean-up activity possible.

FEEDER CATTLE

Feeder cattle futures closed limit higher in most contracts, $1 to $4.5 higher. Support came from live cattle futures which were also limit-higher. The limit higher move will expand limits Friday, which could bring even more volatility through the end of the month. It is uncertain just how much carryover this market activity will bring to the cash feeder cattle market during early May, or just how much uncertainty will redevelop over the next several weeks as live cattle markets try to sort out the balance between cash markets and the sharp rally in futures trade. CME cash feeder index: 4/26: $139.86, up $0.44.

LEAN HOGS

Hog futures surged higher, closing up $0.10 to $2.22. Spring and summer contracts led the complex with triple-digit gains over $2 per cwt. Packers moved into cash markets with higher prices Thursday morning, while June futures moved to $72.82 per cwt. Underlying fundamental support continues with contracts gaining nearly $5 per cwt over the last week. Given the expectation for increased buying interest Friday and firm follow-through buying activity during early May, sustained gains may continue to develop over the next couple of weeks. Carcass values are higher. Losses in butts and ribs offset support in other primals. Pork cut-out: $73.65 up $0.18. CME cash lean index for 4/25: $59.93, down $0.23. DTN Projected lean index for 4/26: $59.71, down $0.12.

FRIDAY'S CASH HOG CALL

Steady to $1 higher. Firm buyer support continues as packers have moved back into the market in order to gain access to end-of-the-week hog supplies. The aggressive move in futures prices will continue to add to cash market support Friday. Cash bids are expected steady to $1 higher, with most prices steady to 50 cents higher. Packers plan a 105,000 head kill on Saturday.

Rick Kment can be reached at rick.kment@dtn.com

(CZ)

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