DTN Closing Livestock Comments

GENERAL COMMENTS

Feedlot managers won another Friday showdown, forcing short-bought packers to pay significantly higher prices for ready cattle. Most of the live business in the South was marked at $124, $2 higher than last week. On the other hand, Northern packers paid as much as $126 on a live basis ($4 higher than last week basis Nebraska) and $198 to $199 on a dressed basis, $8 to $9 higher. The National hog base closed off $0.11 compared with the Prior Day settlement ($52-$58.50, weighted average $58.22). From Friday to Friday, livestock futures scored the following changes: Apr LC up $5.10; Jun LC up $3.28; May FC up $2.70; Aug FC up $3.75; Jun LH off $4.93; Jul LH off $3.80. Corn futures closed 3 cents plus higher, supported by dry conditions in Brazil and sharply higher bean trading. The stock market closed on a mixed basis with the Dow off 11 point and the Nasdaq up 1.

LIVE CATTLE

Futures closed sharply higher, up 10 to 265. The late-week bullish reaction was mostly tied to greater cash spending in feedlot country. Technical-buying also became a factor as contracts scored multi-month highs. Note that June gained significantly on spot April, erasing some of its enormous discount as it prepares to assume the spot position next Tuesday. Beef cutouts: higher on choice and steady on select (choice $221.74, up $1.59; select $204.32, off $0.16) on moderate demand and light offerings (30 loads of choice cuts, 27 loads of select cuts, 8 loads of trimmings, 26 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady to $2 higher. Activity on Monday will be typically limited to the distribution of new showlists. We expect ready numbers to be steady to somewhat larger. Bullish-minded feedlot managers will certainly not hesitate in pricing cattle at least $2 to $3 higher.

FEEDER CATTLE:

Futures closed mostly sharply higher, up 175 to off 42. Feeder traders were obviously motivated to keep pace with rising prices in the live market. Note that the August contract closed the week above its 100-day moving average, landing its best close since March 12. CME cash feeder index: 04/26: $139.99, up $0.50.

LEAN HOGS:

Futures closed mostly sharply lower, off 35 to 137. Summer lean hog issues experienced a tough week, repeatedly hit hard by long liquidation and fears of unmanageably large lean supplies. The June contract closed at 72.62, the lowest level seen since April 3. Seasonally, there is still plenty of time for bulls to put together a decent rally. Having said that, it doesn't appear as though anyone is anticipating better news around the next corner. Pork cutout: $68.61 (FOB Plant), up $0.76. CME cash lean 04/25: $61.23, up $0.79 (DTN Projected lean index for 04/26: $61.75, up $0.52.

MONDAY'S CASH HOG CALL:

Steady. Hog buyers are expected to resume business on Monday with steady bids, hoping that this week's smaller kill will help stabilize and firm the wholesale pork trade.

John A. Harrington can be reached at john.harrington@dtn.com

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