Feedlot country remained dead still through the day with very few bids and asking prices reported. According to the closing report, the national hog base is $1.32 lower ($71-$79.04, weighted average $78.08). Generally speaking, corn futures closed 1-2 cents higher thanks to rather modest short-covering in the wake of Monday's price implosion. Grain trading could turn lackluster over the next few days as specs and commercials await Friday's USDA Acreage and Grain Stocks reports. The stock market closed higher with the Dow up 30 points and the Nasdaq better by 29.
Live contracts tried to bounce higher in the early going, but it didn't take long for would-be bulls to run out of energy. About the best the correction team could produce was a mixed settlement on the close with prices ranging from 40 higher to 52 lower. Beef cut-outs: lower, off $0.32 (select: $201.57) to $0.86 (choice: $216.83) with light to moderate demand and moderate offerings (60 loads of choice cuts, 41 loads of select cuts, 8 loads of trimmings, 19 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL:
Steady to $2 lower. While cash price potential could begin to be sketched out at midweek, a significant market test could be delayed until Thursday or Friday.
Feeder futures closed moderately higher, up 17 to 172. As suggested by the June 1 on-feed report, dry pasture conditions are already redirecting some stockers into feedlots. CME feeder index 06/25: $141.75, off $0.53.
Traders of lean hog issues must have thought Monday’s sell-off was too extreme given a quarterly swine inventory waiting in the wings. More specifically, some may have been impressed with the premium status of the cash index over spot July and August. At any rate, the board managed to land a decent recovery with prices closing 35 to 115 higher. Again, bull-spreading interest was probably recruited by both the premium of the cash index and late year production worries. Carcass value closed nearly a buck higher with all primals contributing except the ham. Pork cut-out: $87.41, up $0.97. CME cash lean index for 06/22: $86.20, up $0.03 (DTN Projected lean index for 06/25: $85.63, off $0.57).
WEDNESDAY'S CASH HOG CALL:
$1 lower. Look for packer bids at midweek to remains on the defensive.
John A. Harrington can be reached at email@example.com
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