DTN Closing Livestock Comments

GENERAL COMMENTS: Cattle markets saw triple-digit gains Friday with feeder cattle futures leading the surge higher. Hog futures were mixed on a combination of follow-through buying and position-taking late Friday. From Friday to Friday, livestock futures scored the following changes: Jun LC off $1.18; Aug LC up $0.02; May FC off $3.10; Aug FC off $1.32; Jun LH up $2.71; Jul LH up $2.25. Cash cattle activity remains sluggish with trade likely done for the week, following light-to-moderate trade in all areas Wednesday and Thursday. Given the support in futures trade, it is likely both sides will wait until next week to determine further market direction and activity. The National Daily Direct afternoon hog report was unavailable at this time due to submission delays. Corn futures posted moderate gains in light trade with July up 4 1/4 cents per bushel. The Dow Jones Index was 76 points lower with Nasdaq down 73 points.

LIVE CATTLE: Buyer support moved into the live cattle complex Friday as traders looked past recent cash market pressure and softness in beef values. Futures closed $0.80 to $1.80 higher. Although prices are still within $2 per cwt of recent lows, the buyer interest that was seen in all contract months Friday is likely to bring additional buying interest into the complex through the end of May. Beef cut-outs: higher, up $0.40 (select, $208.28) to up $0.75 (choice, $220.31) with moderate-to-good demand and light offerings, 109 loads (55 loads of choice cuts, 25 loads of select cuts, 6 load of trimmings, 22 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL: Steady. Limited activity is expected through the early part of the week following weaker cash cattle trade this week. Showlist distribution and inventory-taking is likely to be the extent of activity Monday, although midweek trade may redevelop.

FEEDER CATTLE: Strong buyer interest flooded the feeder cattle trade Friday, pushing futures $0.30 to $2.62 higher. All contracts except lightly traded May posted triple-digit gains, moving $2 per cwt or higher through the end of trade Friday. This momentum allowed the market to break out of its negative cycle seen over the last few weeks. After prices bounced off contract lows early in the week, renewed commercial and noncommercial interest stepped back into the complex. CME cash feeder index for 5/16 is $132.76, up $0.33.

LEAN HOGS: End-of-the-week positioning eroded early support in lean hogs, leading futures to end mixed, $0.30 lower to $0.65 higher. Futures saw limited gains at the end of the day as traders focused on market strength, but traders were less inclined to continue the aggressive rally seen early in the week. Limited losses in deferred futures were due more to end-of-the-week position-taking. The focus on global pork demand in the coming months is overshadowing any pressure from the ongoing U.S.-China trade war. Pork cutouts slipped Friday despite active buying moving back into rib cuts. Pork cutout values fell $0.86 per cwt, moving to $85.27 per cwt on 226 loads. CME cash lean index for 5/15 is $84.20, up $0.53. DTN Projected lean index for 5/16 is $84.59 up $0.38.

MONDAY'S CASH HOG CALL: $1 lower to $1 higher. Limited direction is expected to develop early next week with most bids steady to firm early Monday. In an attempt to limit increased spending and improve margins, packers are expected to curb procurement levels through the coming weeks. Monday's slaughter is expected at 466,000 head.

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

(AG)

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