DTN Closing Livestock Comments

GENERAL COMMENTS

The cash cattle trade was not tested Friday with buyers and sellers content with trade volume generated on Wednesday and Thursday. The national hog base closed up $0.23 compared with the Prior Day settlement ($66.00-$72.00, weighted average $70.86). From Friday to Friday, livestock futures scored the following changes: Jun LC Off $1.72; Aug LC Off $0.72; May FC Off $1.20; Aug FC Off $1.37; Jun LH Up $1.55; Jul LH Up $1.57. Corn futures closed generally 6 cents higher, supported by commercial buying and fears of late planting delays due to rainy forecasts. The stock market closed higher with the Dow off 141 and the Nasdaq better by 28.

LIVE CATTLE

Futures closed significantly higher, up 65-140. The live trade managed to firm past mid-week, once again successfully finding renewed buying interest under chart support at 122 basis June. August seemed to attract the most buying interest Friday and succeeded in closing above 62% retracement of the spring rally. Yet the question remains whether or not the board is discounted enough to accommodate the summer's worst-case cash scenario. Beef cut-outs: Steady (Choice, $247.14 off $0.07, Select $221.42 off $0.24) on light-to-moderate demand and offerings (47 loads of choice cuts, 29 loads of select cuts, 00 loads of trimmings, 12 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady to $2.00 lower. Monday's trade will be typically slow as packers focus on the collection of new showlists. We expect ready numbers to be steady to somewhat larger, possibly inflated by a seasonal increase in ready numbers.

FEEDER CATTLE

Futures closed sharply higher up 87-110. Trading here followed the general direction of the live market and then some. Interestingly, even though corn prices reversed from Thursday's sell-off, the feeder market continued to recover by triple digits. CME cash feeder index: 05/18: $143.86, up $1.81.

LEAN HOGS

Futures closed moderately higher up 90 to off 20. Nearby contracts were well supported by bull-spreading and ideas of improving fundamentals over the next 30-60 days. The July contract managed to finally ring the $80.00 bell, setting a new contract high in the process. Note that spot June and August closed the week just below contract highs, and will start next week within striking distance of the same. Pork cut-out: $87.26 (FOB Plant) up $0.26. CME cash lean 05/17: $74.92, up $0.78 (DTN Projected lean index for 05/18: $75.55, up $0.63).

MONDAY'S CASH HOG CALL

Steady to $1.00 higher. Look for hog buyers to resume work on Monday with firm bids, suspecting that market hog number will continue to tighten through the late spring and early summer.

For more from John, see www.feelofthemarket.com

(CZ)

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