DTN Closing Livestock Comments

Lack of Direction Develops Friday

Rick Kment
By  Rick Kment , DTN Analyst
(DTN file photo)

GENERAL COMMENTS

From Friday to Friday livestock futures scored the following changes: Oct LC up $1.80; Dec LC up $0.20; Oct FC up $0.10; Nov FC off $0.75; Oct LH up $1.23; Dec LH up $1.28. Cash cattle trade remained undeveloped following moderate to active trade seen Thursday. Bids were seen through most of the day Thursday, although interest remained undeveloped at this point. According to the closing report, the national hog base is $0.97 higher compared with the Prior Day settlement ($52.00-$59.50) weighted average $57.48. The corn futures moved higher in light activity. December futures were 3-cent higher Thursday. The Dow Jones Index is 30 points higher with the Nasdaq up 14 points.

LIVE CATTLE

Light market activity Friday kept prices mixed through most of the session ($0.15 lower to $0.47 higher). Trade remains sluggish late Friday with little market direction developing across the complex. There remains very little overall activity developing in either way as October futures allowed for buyers to trickle into the complex, while traders tried to square positions ahead of the weekend break. Beef cut-outs: higher, $0.60 higher (select, $190.05) and up $0.78 (choice, $198.22) with light to moderate demand and moderate offerings (65 loads of choice cuts, 17 loads of select cuts, 14 loads of trimmings, 33 loads of coarse grinds).

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MONDAY'S CASH CATTLE CALL:

Steady. Given the overall strong cattle movement seen Thursday, packer's needs for cattle are expected to be sufficient to get them through next week. The focus Monday will once again be placed on show list distribution and inventory taking which is typical for a Monday. It is likely that bids and asking prices will not be seen Monday and potentially early in the week.

FEEDER CATTLE:

Light to moderate gains have developed in most contracts ($0.05 lower to 0.67 higher) late Friday, which is creating additional buyer support through the end of the week although volume remains light. October through January feeder cattle futures are holding tight trading ranges with prices trading at $153 to $155 per cwt with the focus on the direction of live cattle market support early next week. CME cash feeder index for 10/11 is $155.23 up $0.09.

LEAN HOGS:

Trade through the Friday session remained generally sluggish with October futures moving very little as prices closed 30 cents per cwt lower. Market remained mixed overall ($0.30 lower to $0.77 higher) as firm buyer support stepped into nearby futures at closing bell due to end of the week market adjustments and commercial buyers still willing to move back into the complex. There is growing support through the summer futures. Carcass values firmed based on strong support in Butts, Picnics and Bellies. Pork cut-out: $74.44 up $0.62. CME cash lean index for 10/11: $59.12, up $0.80. DTN Projected lean index for 10/12 $59.51 up $0.39.

MONDAY'S CASH HOG CALL:

Steady to $1.50 higher. The direction of the cash hog market early next week is expected to start out similar to where it is ending Friday, with packers bidding steady to $1 to $1.50 higher. Most bids are expected to be 50 cents to $1 per cwt higher. Aggressive processing schedules are likely to develop early and continue through the entire week as traders remain focused on gaining access to market ready hogs. Monday's slaughter is expected at 460,000 head.

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

(BE)

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Rick Kment