DTN Closing Livestock Comments

Triple-Digit Losses Aggressively Pound Both Cattle and Hog Futures

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


The cash cattle trade remained untested Thursday with bids and asking prices still separated by a country mile or two (e.g., $110 versus $116 basis the South). According to the closing report, the national hog base is $1.26 lower compared with the Prior Day settlement ($60-$67.99, weighted average $63.75). Corn futures settled several cents higher, further supported by mid-month news of lower ending world stocks in 2018-19. The stock market closed mixed with the Dow up 112 points and the Nasdaq off 80.


Live issues open higher, encouraged by follow-through buying and general cash optimism. Yet both of these forces soon seemed to sour, inviting sellers to take the bearish reins. The entire price structure began to fall apart around midsession. October and December did bounce off session lows once buying interest rekindled near 100-day moving averages. Beef cut-outs: moderately higher, up $0.27 (choice: $204.91) to $0.69 (select: $198.27) with moderate to fairly good demand and light offerings (51 loads of choice cuts, 18 loads of select cuts, 10 loads of trimmings, 10j loads of ground beef).


Steady to $2 higher. Well, here we go again. If tomorrow is Friday, it must be time to trade cattle. Look for moderate trade volume to surface sometime between late morning and midafternoon at steady/firm prices.


Feeder issues closed 117 to 160 lower, responding in part to the fading target of deferred live contracts. While spot August did settle below its 8-day moving average low on the close, it did recover some thanks to support near the 40-day moving average. CME feeder index 07/25: $149.21, up $1.04.


Ignoring both the tall premium of the cash index and early session buying interest, lean hogs collapsed late in the trading day to settle in the red by as much as 60 to 180 points. Most contracts settled near session lows, troubled by the darkening forces of both supply and demand. The carcass market imploded, ripped by sharp losses in bellies (off $9.50), picnics (off $5.25), hams (off $2.13) and loins (off $1.72). Pork cut-out: $75.65, off $3.02. CME cash lean index for 07/24: $75.23, off $0.94 (DTN Projected lean index for 07/25: $74.43, off $0.80).


Steady to $1 lower. Hog buyers are expected to remain on the defensive just before the weekend break with further selling fueled by the steep drop in carcass value and limited Saturday kill plans.

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


John Harrington