As of 3:30 CDT Friday afternoon, the cash cattle trade remained unestablished. While live bids in the North had slowly improved, they remained at least $3 below asking prices (i.e., $116 plus). The bid/asking price spread in the South seemed even larger (i.e., $5 or more). We assume that buyers and sellers would still get together to some extent late Friday afternoon or early evening. According to the closing report, the national hog base is $0.63 lower ($58.50-$65.50, weighted average $64.41). Corn futures closed several cents lower, checked by harvest pressure in light volume. The stock market closed higher with the Dow up 33 points and the Nasdaq positive by 144.
While most live contracts closed 35 to 85 points lower, Spot October and December settled in the green thanks to ideas that late-week cash business could end up significantly higher. October closed at $115.37, its best finish since July 21. Beef cut-outs: higher, up $0.57 (select: $192.40) to $0.93 (choice: $203.30) with light to moderate demand and light offerings (39 loads of choice cuts, 20 loads of select cuts, 10 loads of trimmings, 12 loads of ground beef).
MONDAY'S CASH CATTLE CALL:
Steady/firm with Friday's averages. Monday's call is near impossible with Friday's cash still up for grabs. Generally speaking, look for the firm trend to continue. Needless to say, activity on Monday will be primarily linked to the distribution of new showlists.
For the most part, feeder futures settled 7 to 70 lower. New spot November took the biggest hit, no doubt pressured in part by the large discount of the cash index. CME cash feeder index: 10/26: $155.12, up $0.72.
Powered by generally positive fundamentals and spillover buying from the cattle complex, lean hog futures enjoyed a generally progressive week (e.g., from Thursday to Thursday, the February contracts worked 205 higher). So contracts were probably due for a break (not to mention overbought oscillators). Contracts settled 10 to 60 lower. Note that spot December closed the week nearly 450 points below the cash index. The carcass value closed modestly higher as higher butts and bellies overshadowed lower picnic sales. Pork cut-out: $77.56, up $0.19. CME cash lean index for 10/25: $68.28, up $0.96 (DTN Projected lean index for 10/26: $68.94, up $0.66).
MONDAY'S CASH HOG CALL:
Steady to $1 lower. Look for hog buyers to start out next week with steady/soft bids.
John Harrington can be reached at firstname.lastname@example.org
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