DTN Closing Livestock Comments

Cattle Futures Firm Friday

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

GENERAL COMMENTS

Cash cattle trade started to trickle in through the afternoon Friday. Light trade has developed in the North with prices at $107 to $107.50 per hundredweight (cwt) live and $168 to $170 per cwt dressed. Most sales were seen at $107 live and $170 per cwt dressed. Southern trade is developing with limited deals seen at this point at $108 per cwt. Additional trade was expected through late afternoon or the evening Friday, but generally, prices were steady to $1 per cwt higher than last week's levels. According to the closing report, the national hog base was $3.07 higher compared with the Prior Day settlement ($36-$44.50, weighted average $41.34). Corn futures are higher in light activity. September futures were 3/4 cent higher Friday. The Dow Jones Index is 61 points lower with the Nasdaq down 17 points.

LIVE CATTLE

Buyer support pushed live cattle futures higher late Friday with the October futures contract leading the complex higher. Futures close $0.15 to $1.05 higher. Live cattle futures seem to have finally moved past any expectations of post-holiday market pressure as buyer interest moved into all contracts late in the day Friday. The narrow but mixed trading ranges seen early in the week seemed due to traders focusing on beef demand remaining sluggish after the holiday weekend. But traders continue to look for firm market support through the end of the year. Steady seasonal demand support could help to sustain buyer interest over the near future. Beef cut-outs: lower, down $0.74 (select, $197.09) to down $2.19 (choice, $206.56) with moderate demand and heavy offerings (56 loads of choice cuts, 24 loads of select cuts, 29 load of trimmings, 11 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady. Early week trade is expected to remain undeveloped Monday with bids and asking prices unlikely to be seen until sometime midweek. Showlist distribution and inventory-taking will occupy most of the day, which may limit additional moves through the complex.

FEEDER CATTLE:

Firm end-of-the-week buyer support has swept through feeder cattle markets with prices focusing on renewed commercial interest moving back into the complex. Futures closed $0.60 to $1.42 higher. Following several days of lackluster market interest and prices locked in a narrow trading range, firm buying quickly swept through nearby feeder cattle futures. This helped push feeder cattle markets to triple-digit gains in all nearby contracts as October futures led the market higher with gains nearing $1.50 per cwt. The ability to sustain this market move early next week may help to bring about increased market support through the entire complex. CME cash feeder index for 9/5 is $151.04, up $0.44.

LEAN HOGS:

Despite trading lower through most of the session, mixed trade developed at closing bell. This helped to bring back light buyer support in nearby and deferred contracts as traders squared positions at the end of the week. Futures closed $0.60 lower to $0.67 higher. Following a strong rally Thursday in nearby contracts, the overall lean hog complex remains generally unsupported with traders holding moderate to firm losses through most of the session. Late-day buying was able to move back to the complex following a moderate gain in October futures. The market continues to remain focused on increased buyer support through early September, but that aggressive gains seen in spot contracts have been unable to carry through the rest of the market. Pork values firmed at the end of the week following gains in all but rib markets Friday. Pork cut-out: $68.56, up $0.79. CME cash lean index for 9/5: $45.92, up $0.25. DTN Projected lean index for 9/6: $46.01, up $0.09.

MONDAY'S CASH HOG CALL:

Steady to $1 higher. Firm buyer support that has continued to trickle into cash hog markets through the first week of September is expected to help draw additional interest next week. The active procurement rates are expected to continue with plants running full schedules following the Labor Day holiday week. Monday runs are likely to hit 469,000 head.

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

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Rick Kment