DTN Closing Livestock Comments

GENERAL COMMENTS

Generally speaking, feedlot country remained at a standstill for most of the day with bids and asking prices separated by a country mile (e.g., $108-$110 vs. $115, basis the South). We are picking up some late business with $110 paid in the South (steady/firm with last week's weighted average) and $110-$111 paid in parts of Nebraska (steady to $1 higher). According to the closing report, the national hog base is $1.88 higher ($60-$70, weighted average $68.77). Corn futures settled fractionally higher at the conclusion of a quiet trading session. The stock closed significantly lower as trade war talk re-fired. The Dow slumped 251 points lower with the Nasdaq off 20.

LIVE CATTLE

Despite limit advances in spot June and August on Wednesday, traders could muster precious little follow-through in the opening rounds. Profit-taking and beef demand quickly surfaced to strip away a good part of the midweek surge. When the dust settled, live contracts closed 30 to 107 lower with spot June holding up better than deferreds. Beef cut-outs: mixed, up $0.09 (select: $204.47) to off $0.48 (choice: $228.20) with light-to-moderate demand and moderate-to-heavy offerings (80 loads of choice cuts, 42 loads of select cuts, 16 loads of trimmings, 16 loads of ground beef).

FRIDAY'S CASH CATTLE CALL:

Steady to $2 higher. Look for the cash cattle trade to turn moderate to fairly active Friday as well-margined packers aggressively shop for early June slaughter needs.

FEEDER CATTLE:

Feeder issues declined by 22 to 115 with new spot August catching most of the corrective selling. Given the fact that August has taken the point nearly $13 above the spot cash index, the board could prove to be especially vulnerable to any bearish news that rolls down the summer pike. 05/30: $134.82, off $0.04.

LEAN HOGS:

Summer bulls tried early in the session to extend the midweek rally, but technical-selling energy soon resurfaced. June through August were repelled by resistance near 100-day moving averages. The push-back in August was substantial enough for the late-summer issues to settle back below their 40-day moving averages. The board was further pressured by ideas that NAFTA talks were breaking down as both Canada and Mexico announced counter tariffs vis-a-vis the imposition by the U.S. tariffs on steel and aluminum from the European Union, Canada, and Mexico. The carcass value blasted more than $2 higher thanks to much better demand for hams, bellies, loins and picnics. Pork cut-out: $78.22, up $2.17. CME cash lean index for 05/29: $69.50, up $0.04 from 05/25 (DTN Projected lean index for 05/30: $69.63, up $0.13).

FRIDAY'S CASH HOG CALL:

$1-$2 higher. Late-week cash should have a definite sizzle thanks to both tightening receipts and improving product demand.

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

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