DTN Closing Livestock Comments

Lean Hog Futures Fall Hard for Second Consecutive Session

(DTN file photo)

GENERAL COMMENTS

Packer inquiry in feedlot country was both light and uninspiring through the day with bids no higher than $108 in the South and $173-$175 in the North. Some showlists were priced around $115 live and $183 dressed. According to the closing report, the national hog base is $0.66 lower ($76-$83.50, weighted average $82.47). Corn futures closed fractionally higher in slow volume. The stock market closed on a mixed basis with the Dow off 42 points and the Nasdaq up 55.

LIVE CATTLE

2017 live cattle issues closed 22 to 77 higher, supported by short-covering and cash premiums. Spot June nosed back above its 100-day moving average while remaining well below last week's high of $110.65. August momentarily spiked above its 100-day moving average for the first time since early March, though closed right below that technically important threshold. The board appeared to be generally supported by ideas that short-bought packers would eventually be compelled to raise bids toward asking prices. Beef cut-outs: sharply lower, off $1.25 (select: $201.05) to $1.41 (choice: $218.29) with light-to-moderate demand and heavy offerings (89 loads of choice cuts, 37 loads of select cuts, 20 loads of trimmings, 19 loads of ground beef).

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THURSDAY'S CASH CATTLE CALL:

Steady to $2 lower. Despite last week's slow country movement, neither sides seems eager to quickly put wheels under the cash trade. Barring a major collapse in futures, significant trade volume could be delayed until Friday.

FEEDER CATTLE:

For the most part, feeder futures settled 5 to 57 lower with only spot August finishing somewhat in the red (i.e., off 20). Nevertheless, August held above 62% retracement of the first-quarter sell-off. CME feeder index 06/19: $141.41, off $0.07.

LEAN HOGS:

Lean hog issues plunged sharply lower with most contracts off by 100 to 257. Spot July fell below its eight-day moving low for the first time since May 23. Yet July still managed to stop the bleeding above critical support at $79.15 (i.e., its 100-day moving average). The carcass value closed modestly higher with belly, rib and picnic strength overshadowing strength in fresh cuts. Pork cut-out: $84.71, up $0.30. CME cash lean index for 06/18: $84.05, up $1.19 (DTN Projected lean index for 06/19: $85.14, up $1.09).

THURSDAY'S CASH HOG CALL:

Steady to $1 lower. Mired deep in red ink, pork processors are working hard to improve margins. Saturday kill plans are extremely limited.

John A. Harrington can be reached at john.harrington@dtn.com

(BE)

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