DTN Closing Livestock Comments

GENERAL COMMENTS

The cash cattle trade remained essentially untested with beef producers ignoring bids of $122 in the South and $195 in the North. We did hear of a few Northern deals to be delivered in mid-July marked at $193-$195. According to the closing report, the national hog base is $1.26 higher ($80.00-$88.00, weighted average $86.76). The corn market closed 4-5 cents lower, pressured by a yield-friendly seven-day forecast. The stock market closed lower with the Dow off 61 points and the Nasdaq down by 50.

LIVE CATTLE

Live issues settled mostly lower with only spot June finishing in the green. Prices ranged from 35 higher to 32 lower. Yet the bigger story was tied to the way the board reversed from triple-digit losses suffered early in the session. Indeed, most contracts closed more than 200 points above the lows of the day. It remains to be seen whether or not such action represents significant bottom-picking activity. Beef cut-outs: sharply lower, off $1.48 (select, $219.88) to $2.47 (choice, $246.99) with light demand and light-to-moderate offerings (55 loads of choice cuts, 34 loads of select cuts, 26 loads of trimmings, 15 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL:

Steady-$2 lower. Cash trading could at least get started at midweek, perhaps sparked by FCE results (the internet auction has experience technical difficulties in recent weeks, but is said to be returning to its old, more reliable format Wednesday).

FEEDER CATTLE

Settlements could have been worse here as well. Even though feeder issues closed off as much as 95 to 115, August through November did seem to have decent success attracting new buying interest under 140. CME cash feeder index: 06/19: $148.24 off $1.94.

LEAN HOGS

Lean futures closed on a mixed basis with bull-spreading supporting nearbys at the expense of deferreds. Thanks largely to the premium of the cash index and the impressiveness of spot fundamentals, spot July clearly attracted the most buying interest. Indeed, July closed 110 points higher, once again setting a new contract higher in the process. The balance of the field closed between 32 higher and 40 lower. Carcass value exploded higher Tuesday with the belly primal surging $6.84. Pork cut-out: $98.85, up $2.28. CME cash lean index for 06/16: $85.32, up $1.26 (DTN Projected lean index for 06/19: $86.55, up $1.23).

WEDNESDAY'S CASH HOG CALL

$1-$2 higher. Look for the cash hog market to open in the morning with firm bids, supported by both tightening live supplies and improving pork demand.

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

(CZ)

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