DTN Closing Livestock Comments

Cattle Futures Close Week With Mixed Price Action, Slow Volume

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

GENERAL COMMENTS

Moderate cash trading developed in the Southern tier of cattle country Friday afternoon with most live business marked at $111, generally $3 lower than last week. The North was limited to a few odds and ends in the wake of fairly active business that surfaced on Thursday. The National hog base closed off $0.88 compared with the Prior Day settlement ($43-$46, weighted average $45.05). From Friday to Friday, livestock futures scored the following changes: Aug LC off $2.42; Oct LC off $2.75; Aug FC off $2.95; Sep FC off $3.50; Aug LH off $3.70; Oct LH up $0.40. Corn futures closed 11 cents lower pressured by bearish news contained in the Aug. 1 Crop Production report. Specifically, corn production potential was estimated at 14.585 billion bushels, significantly above last month's estimate as well as the average trade guess. The stock market closed lower with the Dow off 196 points and the Nasdaq down by 52.

LIVE CATTLE

Futures closed mixed, off 15 to up 20. Late-week action was largely featureless after it became obvious that prices would be unable to break above the lateral trading range in place since late April. Besides technical-selling in this regard, the board was drained of bullish energy once it became clear that feedlot sales would probably be lower rather than higher. Beef cutouts: firm on choice and weak on select (choice $206.61, up $0.55; select $197.77. off $0.32) on light-to-moderate demand and moderate offerings (46 loads of choice cuts, 20 loads of select cuts, 08 loads of trimmings, 08 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady to $2 lower. Monday's activity will be typically limited to the distribution of new showlists. Our guess is that ready numbers will be about steady with this week. If that proves to be the case, midmonth demand will be very important in determining cash potential.

FEEDER CATTLE:

Futures closed moderately higher, up 2 to 55. Feeders ended the week with a firmer tone than their live counterparts, supported by both sharply lower corn issues and the premium status of the cash index. CME cash feeder index: 08/09: $151.12, up $0.67.

LEAN HOGS:

Futures closed mostly lower, off 115 to up 32. Lean contracts suffered a good deal this week thanks to another round of sharply lower cash sales and technical-selling. Friday's mixed action suggested that both sides wanted to take a risk. Uneven closes were linked to follow-through selling on one hand and late-week short-covering on the other. Pork cutout: $71.07 (FOB Plant), off $0.38. CME cash lean 08/08: $61.88, off $1.29 (DTN Projected lean index for 09/09: $60.04, off $1.84.

MONDAY'S CASH HOG CALL:

$1 lower. Look for opening bids on Monday to be about a buck lower with packers still worried about ample market hog numbers and lackluster pork demand.

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

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John Harrington