Cattle country is virtually dead quiet through midday with not even token bids or wishful asking prices evident. Meaningful trade volume could be delayed until the second half of the week. According to the midday report, the national hog base is 0.98 lower compared with the Prior Day settlement ($71.00-79.04, weighted average $78.42). Corn futures are several cents higher in late morning business, boosted somewhat by short covering and forecasts calling for hotter temps. Stocks are moderately higher at midday with the Dow up 75 points and the Nasdaq stronger by 43.
Live contracts tried to rally early in the session, but short covering interest seemed to quickly fade. Prices near midday are moderately lower for the most part (i.e., off 15 to 75) with only soon-to-expire June trading modestly higher. Many are confused over midsummer fundamentals, but more seem confident of large supplies than adequate beef demand. Beef cut-outs are mixed at midday, up 0.21 (select, $202.10) to off 0.23 (choice, $217.46) with light to moderate box movement (30 loads of choice cuts, 15 loads of select cuts, 8 loads of trimmings, 13 loads of coarse grinds).
Feeders are mostly lower near the top of the noon hours with prices generally 20 to 62 lower. A small handful of far-deferred issues are trading a bit higher.
Lean hog issues are trying hard at midday to erase the price stumble seen on Monday. Gains at this time range from 10 to 117 higher with nearbys July and August attracting the most buying interest. Short term bull spreading strategies probably make sense give cash premiums on one hand and bearish expectation tied to the June 1 report (e.g., a record large spring pig crop) on the other. Carcass value at midday is significantly higher, supported by better demand for ribs (up $5.30), loins (up $1.83), and bellies ($1.11). Pork cut-out: $87.37, up 0.93. CME cash lean index for 06/22: 86.20, up 0.03 (DTN Projected lean index for 06/25: 85.63, off 0.57).
John A. Harrington can be reached at firstname.lastname@example.org
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