DTN Closing Livestock Comments

Cattle Futures Close Week Mixed, Still Waiting For Cash News

John Harrington
By  John Harrington , DTN Livestock Analyst
(DTN file photo)

GENERAL COMMENTS

After a week-long standoff, some live business is finally surfacing in parts of the South late Friday afternoon (i.e., $111, $1 to $2 lower than last week). However, the North remains quiet with bids and asking prices separated by as much as $10 or more. The National hog base closed off $0.86 compared with the Prior Day settlement ($67-$76, weighted average $74.19). From Friday to Friday, livestock futures scored the following changes: Aug LC off $1.82; Oct LC off $2.25; Aug FC off $1.48; Sep FC off $1.20; Jul LH off $1.42; Aug LH off $5.27. Corn futures closed 4 to 6 cents lower, essentially erasing the post-report rally seen on Thursday. Temperatures are expected to moderate in major growing areas next week. The stock market closed higher with the Dow off 94 points and the Nasdaq better by 2.

LIVE CATTLE

Futures closed moderately lower, off 17-52. Live issues experience considerable difficulty through the week, garnering little help from feedlot premiums. Part of the problem was no doubt tied to demand worries and the defensive behavior of beef cutouts through the week. Spot August through December did manage to stay within the lateral range as defined by 40-day and 100-day moving averages. Beef cutouts: sharply lower on choice and weak on select (choice, $204.14 off $2.44, select $196.37 off $0.64) on light-moderate demand and offerings (43 loads of choice cuts, 21 loads of select cuts, 0 loads of trimmings, 16 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady with this week's weighted averages (whatever they turn out to be). Monday's activity will be limited to the distribution of new showlists. Given the lack of activity as of this writing, showlists are likely to be larger thanks to unsold steers and heifers carried over. On the other hand, this week's slow activity could certainly cause packers to start out Monday short-bought.

FEEDER CATTLE:

Futures closed mixed, up 24 to off 30. Generally speaking, feeders outperformed their live counterparts this week, supported in that regard by both lower corn action and the impressive performance of a rising cash feeder index. CME cash feeder index: 07/12: $148.16, up $1.00.

LEAN HOGS:

Futures closed mostly sharply higher, up 165 to off 27. Regardless whether they made or lost money, traders of lean hog futures this week were certainly not bored. For example, after setting two consecutive sessions of new contract lows, deferred contracts rallied sharply Thursday and Friday thanks to late-week short-covering and profit-taking. Overall, lean charts suffered significant technical damage as traders ran from the scary combination of record pork production over the next several quarters and demand disruptions possibly tied to the accelerating trade war. Pork cutout: $83.82 (FOB Plant) up $0.31. CME cash lean 07/11: $81.26, off $0.26 (DTN Projected lean index for 07/12: $80.91, off $0.35.

MONDAY'S CASH HOG CALL:

Steady to $1 lower. Cash hog buyers are likely to start out Monday on the defensive, sensing that market hog numbers have bottomed and midsummer pork demand will remain uninspired.

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

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John Harrington