DTN Closing Livestock Comments

GENERAL COMMENTS

Cattle buying interest improved by a few inches here and there, but certainly not enough to generate more than token business. Asking prices remain firm at $115 plus live and $184 to $185 plus dressed. According to the closing report, the national hog base is $1.66 higher ($67.00 to $77.00, weighted average $74.26). The corn trade closed 2 to 3 cents lower with spot July setting a new four-month low. The stock market closed mixed with the Dow up 95 points and the Nasdaq off 54.

LIVE CATTLE

Live cattle issues held solid gains for most of the session, supported by short covering and ideas of cash stability/firmness. Yet bulls gave up the ghost in the last hour of trading, allowing the board to close no better than mixed. Interestingly, this was the second consecutive session where the market ran out of gas late in the day. Beef cut-outs: lower, off $.24 (select: $203.41) to $.56 (choice: $226.41) with light to moderate demand and offerings (44 loads of choice cuts, 28 loads of select cuts, six loads of trimmings, 41 loads of ground beef).

FRIDAY'S CASH CATTLE CALL:

Steady to $2 higher. If it's Friday, it must be time to trade cattle. That's certainly been the timetable lately. While both sides are backed into a corner of sort, our guess in that short-bought packers will be the first to blink.

FEEDER CATTLE:

Feeder issues also closed on a mixed basis, up 50 points to off 67. While the gap between spot August and the cash index has been narrowing, the board still commands a 650 point premiums over the index. 06/06: $139.65, up $.44.

LEAN HOGS:

After Wednesday's triple-digit surge forward, lean hog contracts took a breather today. Final settlement ranged from 52 higher in the far deferred and 105 lower in late summer August. It was a slow session with specs and spreaders taking profits. The action produced nothing new of technical significance. The carcass value closed solidly higher with all primals contributing except the butt and rib. Pork cut-out: $79.03, up $.79. CME cash lean index for 06/05: $72.50, up $.77 (DTN Projected lean index for 06/06: $73.50, up $1.00).

FRIDAY'S CASH HOG CALL:

$1 to $2 higher. It would appear that ready numbers are shrinking at a faster rate than packer willingness to kill hogs. Look for further cash strength in the morning.

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

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