Bullish cattle traders seemed disappointed that significant cash trading had failed to develop before the Friday afternoon CME close, which would partially explain the modest futures losses posted as pit trading wound down. The industry probably expects fed cattle to change hands around 129 cents/pound across the Great Plains this evening, thereby at least partially justifying the premiums built into nearby futures. Ultimately, persistent country gains and/or a wholesale breakout to record highs might be required to push the February and April contracts beyond their Thursday peak, but that is not guaranteed. February cattle declined 0.90 cents to 132.90 cents/pound Friday, while April lost 0.55 cents to 136.77 cents/pound to end the week.
Thursday afternoon reports indicating sizeable gains in cash hog and wholesale pork values very likely played a substantial role in boosting nearby futures Friday morning. Strong gains by the various pork cuts seemed quite impressive, thereby offering additional support. However, traders reportedly became much less persuaded of the wholesale outlook later in the day, which along with the cattle reversal, would go far in explaining the late slide in swine values as well. The premiums already built into Chicago prices also make it rather hard to sustain rallies, since the CME lean hog index remains several cents below the nearby contracts (and far below the bullish forecasts implicit in deferred futures). February hogs ended the week having slipped 0.17 cents to 86.22 cents/pound, while June futures lost 0.20 cents to 98.75 at the close.