Feedlot country remains untested at midday with just a few scattered bids reported across the area ($109-110 in the South; $l09/$172-173 in the South). Asking prices are around $112-plus in the South and $175-plus in the North. It looks like we're in for another eleventh hour showdown sometime Friday. According to the midday report, the national hog base is 0.54 lower ($57.50-63.00, weighted average $61.86). The corn market is 1-2 cents lower near the top of the noon hour as prices continue to bang around in a narrow trading range. Equities are generally lower at midday with the Dow off 36 points and the Nasdaq down by 45.
Live cattle issues seem to be sagging near midday (off 45 to 70 points), even though action has been on the choppy side for most of the morning. The slow way the cash market is developing this week has drained aggressive buying interest here (at least for the moment).
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Some of the long liquidation may be tied to nervousness in the face of tomorrow's on feed report which many fear will confirm yet another round of larger placement activity. Beef cut-outs are solidly higher at midday, up .50 (choice, $197.76) to $1.34 (select, $190.43) with light to moderate box movement (39 loads of choice cuts, 19 loads of select cuts, 4 loads of trimmings, 13 loads of coarse grinds).
Following the defensive lead of live issues, feeder futures also look moderately lower as traders move into the final hour of market business. Currently, prices are 10-40 lower. Again, the premium status of the cash index should work as brakes on any expended sell-off.
Although lean hog issues started the day with a decent head of steam, buying interest has cooled near midday. At the time, contracts are no better than narrowly mixed, up 5 to off 55. The rising cash index is understandable lending more support to nearby issues than their deferred counterparts. The carcass value at midday is essentially steady as higher loin sales offset softer ham, picnic, and belly biz. Pork cut-out: $73.93, up .05. CME cash lean index for 10/17: 62.21, up 1.21 (DTN Projected lean index for 10/18: 63.34, up 1.13).
John A. Harrington
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