The cash cattle trade was lower in most areas, pressured by seasonally larger ready numbers and lackluster beef demand. Live business in the South ranged from $109 to $110, generally $2 to $3 lower than last week. Most dressed deals in the North were marked at mostly $172, generally $5 lower than last week's weighted average basis Nebraska. The National hog base closed off $1.61 compared with the Prior Day settlement ($73 to $81.49, weighted average $79.97). From Friday to Friday, livestock futures scored the following changes: Jun LC off $0.18; Aug LC up $1.13; Aug FC up $1.23; Sep FC up $1.55; Jul LH off $1.90; Aug LH off $2.88. Corn futures closed fractionally mixed in lackluster trade volume. The stock market closed mixed with the Dow up 119 and the Nasdaq off 20.
Futures closed mostly higher, up 57 to off 37. Nearby contracts tried moving higher in the early going, hopeful that decent packer buying interest in the country might produce near-steady sales. But spot June and August started to fade once it became obvious that cattle buyers would stick with lower bids. The June 1 on-feed report turned out to be somewhat negative thanks to larger-than-expected placement activity: June 1 on feed 104%; placed in May 100%; marketed in May 105%. Beef cutouts: steady to firm (choice, $217.16 off $0.25, select $202.02 up $0.41) on light to moderate demand and light offerings (27 loads of choice cuts, 21 loads of select cuts, 11 loads of trimmings, 33 loads of coarse grinds).
MONDAY'S CASH CATTLE CALL:
Steady to $2 lower. Monday will be typically limited to the distribution of new showlists. We expect ready numbers to be steady to larger.
Futures closed moderately higher, up 20-72. Late-week feeder buying was supported by short-covering and promises of plentiful feed ahead. Spot August put in a solid week, closing above 62% retracement of the first-quarter price drop. CME cash feeder index: 06/21: $142.57, up $0.36.
Futures closed mixed, off 65 to up 17. July through October generally lost ground to deferred contracts. Such weakness was probably caused by bull-spreaders taking profits. Furthermore, margin-stressed pork processors worked hard this week to improve profit potential, leaning into the cash market and pushing the pork cutout higher. Pork cutout: $85.64 (FOB Plant) up $0.60. CME cash lean 06/20: $85.79, up $0.65 (DTN Projected lean index for 06/21: $86.17, up $0.38.
MONDAY'S CASH HOG CALL:
Steady to $1 lower. Hog buyers are expected to resume work on Monday with lower bids. Packers did a decent job of improving margins this week, but it remains to be seen how long they can live with slower chain speed and smaller pork production.
John A. Harrington can be reached at email@example.com
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