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.
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).
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.
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 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 email@example.com
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