The cash cattle market remained untested Thursday, setting the stage for yet another late-week showdown between short-bought packers and bullish-minded feedlot managers. Bids and asking prices Thursday were separated by at least $4 on a live basis (e.g., $106 versus $110-plus in the South). According to the closing report, the national hog base is .96 higher ($46.00-54.00, weighted average $52.15). Corn futures closed a penny-plus higher, supported by spillover buying from beans and rain slowing harvest progress. The stock market closed higher with the Dow up 113 points and the Nasdaq better by 50.
Live futures looked fairly listless in the early going, but impressive buying interest gathered steam past midsession. Prices eventually settled 45 to 112 higher, supported by bull-spreading, cash optimism, and technical considerations. Regarding the latter, most contracts settled above 10-day average moving highs. Beef cut-outs: lower, off .16 (choice: $197.25) to .77 (select: $188.78) with light to moderate demand and moderate offerings (65 loads of choice cuts, 44 loads of select cuts, 6 loads of trimmings, 22 loads of ground beef).
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FRIDAY'S CASH CATTLE CALL:
Steady to $2 higher. Look for light to moderate business to surface Friday sometime between late morning and mid-afternoon.
Feeder futures jumped sharply higher, advancing by triple digits in essentially all contracts (i.e., up 135 to 170). Buying energy seemed to be linked to the premium of the cash index as well as the ongoing strength of deferred live issues. CME cash feeder index: 10/04: 156.21, up .56.
Lean hog futures settled widely mixed, up 90 to off 17. The fact that the first three contracts gained on deferreds suggested the popularity of bull-spreading. With barely a week left before expiration, spot October closed more than $5 above the cash index. Needless to say, the nearby board has been impressive by the strength of this week's cash trade. Carcass value held steady as higher bellies and loins offset weakness in picnics and hams. Pork cut-out: $72.88, unch. CME cash lean index for 10/03: 54.97, up .58 (DTN Projected lean index for 10/04: 55.33, up .36).
FRIDAY'S CASH HOG CALL:
$1 to $2 higher. Positive cash momentum is likely to continue through the end of the week, a function of excellent processing margins and somewhat more manageable country receipts.
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