DTN Closing Livestock Comments

Cattle Futures Close Substantially Higher

John Harrington
By  John Harrington , DTN Livestock Analyst
(DTN file photo)


Thursday's cash cattle trade was limited to just a few scattered deals across the feeding area at prices generally steady with Wednesday's retreat (i.e., $106 live; $169-$170 dressed). According to the closing report, the national hog base is $0.08 higher ($69-$78.50, weighted average $77.10). Corn futures fell hard in late selling with old- and new-crop contracts losing 6-7 cents plus. Bears seemed to ignore the uncertainty linked to Friday's USDA report on stocks and acreage. Equities closed higher with the Dow up 98 points and the Nasdaq better by 58.


Live contracts closed significantly higher with nearbys powered by bull-spreading and ideas of oversold charts. Soon-to-be-spot August closed back above its 40-day moving average, but faces major overhead resistance in the gap areas created on Monday. Beef cut-outs: sharply lower on choice product, off $0.22 (select: $200.66) to $2.06 (choice: $213.24) with light to moderate demand and offerings (60 loads of choice cuts, 29 loads of select cuts, 6 loads of trimmings, 18 loads of ground beef).


Steady with Wednesday's decline. While some clean-up action is possible, cash business seems essentially done for the week.


With the exception of a few deferred contracts, feeders closed 10 to 105 points higher. The front-end was supported by both strength in deferred live issues and lower corn action. CME feeder index 06/27: $142.55, up $0.77.


Generally speaking, lean futures settled higher, though most of the buying interest was tied to spot July (up 90) and August (up 67). The June 1 inventory documented a record number of market hogs for early summer (3% greater than last year). Total hogs and the breeding herd were also 3% larger than 207. Yet the expansion indicated was fairly well anticipated and doesn't seem to be a bearish surprise per se. Carcass value closed modestly lower with rib and ham weakness slightly overshadowing loin, picnic and belly strength. Pork cut-out: $87.59, off $0.07. CME cash lean index for 06/26: $84.82, off $0.81 (DTN Projected lean index for 06/27: $84.32, off $0.50).


Steady. Look for the late-week cash hog trade to be both steady and slow.

John A. Harrington can be reached at john.harrington@dtn.com


John Harrington