The cash cattle market remained stone quiet through Wednesday with no real bids noted and just a few preliminary suggestions of asking prices (e.g., $126 to $127 in the South). According to the closing report, the national hog base is $1.65 higher ($54.50-62.50), weighted average $60.54). The corn trade was so slow Wednesday that we wanted to periodically check for a pulse. The stock market closed higher with the Dow up 88 points and the Nasdaq better by 58.
Live issues closed on a mixed basis, up 27 to off 40. Some bears saw the board's inability to build on Tuesday's bounce as disappointing, as a reflection of cash pessimism vis-a-vis larger fed cattle supplies through the first quarter. On the other hand, some bulls were generally pleased with the ability of futures to consolidate in the wake of recent technical progress. Positively, April closed above its 40-day moving average for the first time since late November. Beef cut-outs: sharply higher, up $2.59 (select: $199.16) to $3.48 (choice: $208.62) with moderate demand and light to moderate offerings (68 loads of choice cuts, 30 loads of select cuts, 21 loads of trimmings, 37 loads of ground beef).
THURSDAY'S CASH CATTLE CALL:
Steady to $2 higher: Packer bids should start to assume some definition on Thursday, though significant trade volume could easily be postponed until Friday.
The closing price spread in the feeder market (i.e., up 45 to off 15) proved even narrower than that seen in the live trade (at least in the first three months). Needless to say, the potential for further strength is tied to the fortunes of deferred live contracts going forward. CME cash feeder index: 01/02: 155.90, up .57.
Lean hogs rebounded from Tuesday's slow start by closing Wednesday mostly 17 to 65 points higher. Traders seem to tap buying interest from short-covering interest, technical encourage, and signs of greater packer spending in the country. July through December managed to set new contract highs. Carcass value closed moderately higher, checked only by a $2.27 loss in the belly primal. Pork cut-out: $78.76, up .43. CME cash lean index for 12/29: 62.23, up .51 (DTN Projected lean index for 01/02: 62.75, up .52).
WEDNESDAY'S CASH HOG CALL:
Steady to $1 higher. Hog buyers should continue to push somewhat hard for slaughter barrows and gilts in the morning.
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