Short-bought cattle buyers have come out swinging with higher bids through the morning. Moderate trade volume has surfaced in most areas at higher prices (i.e., $112-113 live in the South, $4.50-5.50 higher than last week; $175-$180 dressed in the North, $5-10 higher). We understand cattle buyers have paid as high as $114 live in western Nebraska. According to the midday report, the national hog base is 0.44 lower compared with the Prior Day settlement ($75.00-77.50, weighted average $76.27). Corn futures are 4 cents higher at midday, supported by spillover buying from beans and forecasts for hotter and drier weather next week over major growing areas.
Excited by the explosive nature of late week cash, live cattle issues are sharply higher near midday, up 37 to 152. Spot August is clearly leading the charge with the help of bull spreading, technical buying, and promising cash news. Beef cut-outs are mixed at midday, up 0.38 (select, $199.08) to off 0.30 (choice, $208.13) with light to moderate box movement (43 loads of choice cuts, 21 loads of select cuts, zero loads of trimmings, 21 loads of coarse grinds).
Feeder futures are rolling higher at midday with triple-digit progress (i.e., up mostly 100 to 147). Renewed feedlot profits and strength in deferred live contracts have rejuvenated spec and commercial buying interest.
Lean hog futures are lower as the trade moves into the final business hour of the week. Prices are generally 15 to 162 in the red with spot July catching the most heat. Note that the cash index continues to slowly erode, support some notions that the summer of 2018 has already seen the most bullish mixture of supply and demand. Needless to say, the late wave of higher tariffs by China and Mexico can't help psychology. Carcass value cracked by nearly a buck at midday, pressured by softer demand for ribs, hams, and picnics. Pork cut-out: $85.20, off 0.99. CME cash lean index for 07/03: 82.24, off 0.27 (DTN Projected lean index for 07/05: 82.11, off 0.13).
John A. Harrington can be reached at firstname.lastname@example.org
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