Feedlot country was a virtual ghost town through the day with nary a single bid nor asking price evident. According to the closing report, the national hog base is $0.90 lower compared with the Prior Day settlement ($67-$73.50, weighted average $71.86). The corn market closed 4 1/2 cents higher, supported by Monday's drop in corn ratings (i.e., 75% good to excellent nationwide the previous week to 72% last week). The stock market closed higher with the Dow up 55 points and the Nasdaq better by 49.
For the most part, live contracts closed moderately lower, off 5 to 50 points. August through December still managed to hold above 100-day moving averages, but October and December only by a few whiskers. Spot August looked a bit healthier in that regard, but faces tough overhead resistance around $107.50. Beef cut-outs: solidly higher, up $0.63 (choice: $204.39) to $1.19 (select: $196.86) with moderate to fairly good demand and moderate to heavy offerings (89 loads of choice cuts, 30 loads of select cuts, 15 loads of trimmings, 13 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL:
Steady. The potential of cash trading should start to define itself Wednesday, at least in terms of preliminary bids and asking prices. Significant trade volume could be delayed until Thursday or Friday.
Feeder contracts settled on a mixed basis with closes ranging from 30 higher to 110 lower. Most of the selling energy focused on the first three nearby issues. CME feeder index 07/16: $148.37, up $0.10.
The debut of August lean futures as spot month didn't exactly promise a rock-star career. Despite the fact that August took the point more than $11 below the cash index, traders apparently decided that it still remained overpriced. August closed another 130 points lower, plunging to a new contract low of $67.72. Given such bleak leadership and ongoing fears of record, unmanageable pork production over the next several quarters, the rest of the lean field faltered by 60 to 180 points. The carcass value closed up thanks to better demand for loins, ribs and hams. Pork cut-out: $84.20, off $0.83. CME cash lean index for 07/13: $80.34, off $0.57 (DTN Projected lean index for 07/16: $79.69, off $0.65).
WEDNESDAY'S CASH HOG CALL:
Steady to $1 lower. Expect hog buyers to keep the pressure on at midweek given their success in moving decent numbers with lower bids.
John A. Harrington can be reached at firstname.lastname@example.org
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