Activity in cattle country is limited to the distribution of new showlists. The late month fed offering looks generally smaller, especially in Kansas and Colorado. According to the midday report, the national hog base is .21 higher compared with the Prior Day settlement ($72.00-80.38, weighted average $80.13). Corn futures near the top of the noon hour are 5-6 cents lower, checked by positive growing condition and uninspiring export business. Pressured by reports that the Trump administration is preparing to restrict investment in U.S. technology by Chinese companies, the stock market is significantly struggling at midday with the Dow off 368 points and the Nasdaq down by 184.
Live contracts opened sharply lower and have remained under substantial selling pressure throughout the morning. At midday, losses range from 160 to 300 points. Factors contributing to this early wave of bearishness include the larger than expected May placement total reported Friday, the lower feedlot sales late last week, and last week's huge kill off 664,000 head (the largest round seen so far on 2018). Beef cut-outs are mixed at midday, up 0.77 (choice, $217.93) to off 0.17 (select, $201.85) with light box movement (31 loads of choice cuts, 15 loads of select cuts, 6 loads of trimmings, 6 loads of coarse grinds).
Feeder issues are tanking at midday with contracts down as much as 222 to 395. Limit losses in the live market seem primarily responsible for the sell-off here. Indeed, the vibes are depressing enough to completely block out the theoretical support of sharply lower corn. On an estimated run of 8,000 head (near steady with last week and up from 5,823 in 2017), Oklahoma City is not well tested in the early rounds, but a lower undertone seems evident.
Lean hog futures are under less selling pressure than cattle paper, but a bearish sting at midday is still pronounced. Prices are currently 27 to 152 points lower with the first three contracts caving triple digits. Nearbys are pressured thanks to lower cash sales and profit taking by bull spreaders. The carcass value is modestly lower at midday with softer demand for hams and loins overshadowing stronger interest n bellies, ribs, and butts. Pork cut-out: $84.85, off 0.19. CME cash lean index for 06/21: 86.17, up 0.38 (DTN Projected lean index for 06/22: 86.20, up 0.03).
John A. Harrington can be reached at email@example.com
© Copyright 2018 DTN/The Progressive Farmer. All rights reserved.