Besides a few odds and ends in parts of the North, the cash cattle trade was strangely quiet Friday. Trade volume totals as of this writing were very small. Clearly, buyers and sellers vigorously disagree over the question of cattle value with bids and asking prices separated by as much as $6 to $7. We suppose it is still possible that some business could surface later Friday afternoon. The National hog base closed up $1.20 compared with the Prior Day settlement ($76 to $84, weighted average $82.87). From Friday to Friday, livestock futures scored the following changes: Jun LC off $1.57; Aug LC off $1.00; Aug FC up $0.70; Sep FC off $0.15; Jul LH up $1.00; Aug LH up $1.13. Corn futures closed several cents lower, pressured by favorable growing conditions and spillover selling from sharply lower action in soybeans. Pressured by news of greater tariffs imposed on Chinese imports, as well as the threat of a growing trade war, the stock market struggled through most of the trading session. However, final settlements were just moderately lower with the Dow 84 points and the Nasdaq down 14.
Futures closed sharply higher, up 115 to 290. Most contracts successfully rallied from the bottom to the top of long-held trading ranges. That said, the large late-week rally really didn't produce anything of technical significance. Most of the buying seemed to be tied to short-covering and suggestions that late-week cash business would be close to steady with last week. Beef cutouts: weak on choice and higher on select (choice, $221.59 off $0.49, select $202.73 up $0.76) on light-to-moderate demand and offerings (53 loads of choice cuts, 21 loads of select cuts, 30 loads of trimmings, 16 loads of coarse grinds).
MONDAY'S CASH CATTLE CALL:
Steady. Needless to say, it is tough to predict Monday's cash when this week's market has not yet been established. Nevertheless, Monday's activity will be limited to the distribution of showlists. Thanks to Friday's lack of activity, showlists should be larger on Monday and packers should be quite short-bought.
Futures closed sharply higher, up 82 to 430. The feeder trade was supported both by buying in the live market and the corn trade's defensive undertone. Note that spot August closed above its 100-day moving average as well as 50% retracement of the first-quarter price drop. August closed at $149.97, its best settlement since May 30. CME cash feeder index: 06/14: $140.73, up $0.03.
Futures closed mixed, off 100 to up 32. The lack of active trading here was somewhat surprising given the stoking of trade war fears. Nevertheless, traders just seemed interested in late-week profit-taking and positioning. Note that China announced retaliatory tariffs Friday afternoon, specifically listing the imposition of duties on U.S. beans, chicken and pork. Pork cutout: $84.09 (FOB Plant) up $1.69. CME cash lean 06/13: $80.09, up $1.38 (DTN Projected lean index for 06/14: $81.44, up $1.35.
MONDAY'S CASH HOG CALL:
$1 to $2 higher. The cash hog market is expected to start on Monday with a firm undertone tied to both tightening live supplies and appreciating carcass value.
John A. Harrington can be reached at email@example.com
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