For the most part, the cash cattle trade is still waiting to be born at midday. A small handful of deals have been made in parts of the North. Some buyers have paid $188 here and there on a selective basis (maybe $1 higher than last week's weighted average basis Nebraska), but not really enough to suggest a trend. In the South, bids and asking prices remain separated by as much as $5 (i.e., $114 versus $119 or better). Asking prices of $119-$120 and $190-plus seem firm, possibly delaying decent trade volume until late this afternoon. According to the midday report, the national hog base is $1.12 higher ($53.50-$57.75, weighted average $57.72). The corn trade is sagging by several cents, checked by general apathy in the face of the same old bearish news. The stock market is higher near the top of the noon hour with the Dow up 147 points and the Nasdaq positive by 72.
Live contracts were rather lackluster through midsession, but buyers seem to be rewriting the strip at midday. Prices are currently 40 to 152 higher with the first three contracts holding triple-digit gains. Bulls seem to be smelling higher packer bids waiting in the wings. Yet chances are CME trading will be closed before the cash question is definitively answered. Beef cut-outs are mixed at midday, up $0.75 (choice, $201.79) to off $0.08 (select, $183.61) with light-to-moderate box movement (59 loads of choice cuts, 11 loads of select cuts, zero loads of trimmings, 6 loads of coarse grinds).
For the most part, feeder issues in late-morning business are moderately higher (i.e., up 65 to 90), supported by short-covering, softer corn prices and the premium status of the cash index. Needless to say, new energy in the live market is also making a positive difference here.
Lean futures opened lower, but turned moderately higher after the first hour or so, supported by reports of greater packer spending for barrows and gilts. Currently, lean contracts are 30 to 52 points in the green. Firmer lean issues may also be getting some help from spillover friendliness from the cattle complex. Carcass value at midday is modestly higher with stronger bellies and ham sales overshadowing softer picnic, butt and rib sales. Pork cut-out: $77.52, up .21. CME cash lean index for 12/13: $64.64, off $0.22 (DTN Projected lean index for 12/14: $64.11, off $0.53).
John A. Harrington can be reached at email@example.com
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