The cash cattle market was limited to light trade in parts of Nebraska with some live steers and heifers marked as much as $5 lower than last week (i.e., $110). Yet most feedlot managers across feeding country continue to hold for higher bids. According to the closing report, the national hog base is $0.92 higher ($75-$85, weighted average $81.86). Corn futures imploded by as much as 13 cents, pressured by positive growing conditions and aggressive long liquidation by noncommercials. The stock market closed mixed with the Dow off 25 and the Nasdaq up 65.
For a short time early this week, it looked like spot June live was finally ready to break out and move toward the cash premium. Yet looking at another sharp drop Thursday, such an idea now seems like wishful thinking. Live issues settled sharply lower, off 90 to 212. Apparently convinced that last week's red-hot cash market could in no way hold, the board quickly returned to the discount playbook. Right or wrong, spot June closed the session as much as $8.41 below last week's 5-area steer weighted average. Beef cut-outs: sharply lower, off $0.33 (select: $201.97) to $1.82 (choice: $222.08) with light-to-moderate demand and moderate-to-heavy offerings (62 loads of choice cuts, 31 loads of select cuts, 13 loads of trimmings, 19 loads of ground beef).
FRIDAY'S CASH CATTLE CALL:
Steady to $2 lower. Moderate trade should surface sometime Friday. Thanks to the combo of struggling cut-outs and futures, feedlot price potential looks more limited than it did earlier in the week.
Spot August closed below both the 40-day moving average and 38% retracement of the first-quarter rally. CME feeder index 06/13: $140.70, off $0.32.
With the exception of expiring June, lean hog futures closed sharply lower, mostly off 100 to 177. Spot June settled at $81.17, up 17. Besides long liquidation and profit-taking, lean issues seemed victimized by the general commodity sell-off. August closed back below its 100-day moving average, and December landed south of its 40-day moving average. Carcass value closed moderately higher, especially supported by a $4.56 spike in the belly primal. Pork cut-out: $82.40, up $0.71. CME cash lean index for 06/12: $78.71, up $1.53 (DTN Projected lean index for 06/13: $80.09, up $1.38).
FRIDAY'S CASH HOG CALL:
$1-$2 higher. Look for hog buyers to complete late-week procurement chores with another round of higher bids.
John A. Harrington can be reached at email@example.com
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