Light to moderate trade volume is evident in several areas of cattle feeding country at midday with some live sales as much $1-2 higher than Wednesday on a live basis (i.e., $107-108). According to the midday report, the national hog base is 0.31 lower compared with the Prior Day settlement ($68.00-78.50, weighted average $76.57). Despite acres (i.e., 89.13 million) and June 1 stocks (i.e., 5,306 billion bushels) that came in a little larger than expected, corn futures are holding forward progress of 3-4 cents near the top of the noon hour. The stock market is solidly higher at midday with the Dow up 236 points and the Nasdaq positive by 41
Beside the expiring spot month, live futures are sharply higher going into the final hour of the session (i.e., up 180 to 300). Aggressive end of the quarter short covering/profit taking and technical buying seem to be the major workhorses. August through December have climbed above 100-day moving averages at midday. Spot June is scheduled to officially expire at 12:00 CST. Beef cut-outs are lower at midday, off 0.08 (choice, $213.16) to 0.83 (select, $199.83) with light to moderate box movement (27 loads of choice cuts, 26 loads of select cuts, 10 loads of trimmings, 14 loads of coarse grinds).
Feeder futures are on fire at midday (i.e., up 287 to 440), supported by spec and technical buying. Spot August is trading at its highest level since March 7. Some believe that the aggressive pace of feedlot placement through the first half of 2018 will limit available feeder supplies in the second half of the year.
Lean hog futures are widely mixed at midday with summer issues well-supported (i.e., up 90 to 177) and deferred contracts under triple digit selling pressure (i.e., off 70 to 197). Spooked by the threat of record fourth-quarter pork production. October and December gapped early to new contracts lows. While they remain under pressure, some deferreds have rallied as much as 200 points off early lows. Carcass value is more than a buck lower at midday, especially pressured by softer demand for ribs (off $7.44), hams (i.e., off $1.85), and loins (i.e., off 0.74). Pork cut-out: $86.57, off $1.02. CME cash lean index for 06/27: 84.32, off 0.50 (DTN Projected lean index for 06/28: 83.69, off 0.63).
John A. Harrington can be reached at email@example.com
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