Cash cattle markets remain quiet with very sluggish movement on either side Wednesday. Although a few bids held through the day at $110 per hundredweight (cwt) in the South, it is evident that very little momentum is being built. Asking prices were more evident midweek with live asking prices of $115 to $116 per cwt, while dressed cattle are priced at $180 to $185 per cwt. It is likely to be late Thursday of sometime Friday before active trade develops. According to the closing report, the national hog base is $2.16 lower compared with the Prior Day settlement ($46-$50, weighted average $47.70). Corn futures were higher in light activity with July up 1/2 cent. The Dow Jones Index closed 45 points lower with the Nasdaq up 4 points.
Limited activity developed Wednesday afternoon with very little direction seen in the live cattle trade. Most of the moves followed shifts seen in feeder cattle markets. Futures closed $0.27 lower to $0.15 higher. Early pressure quickly eroded following a lack of follow-through selling in the feeder cattle trade. This continues to add some stability to the live cattle markets despite the aggressive widespread pressure in other livestock trade. Beef cut-outs: higher, up $0.35 (select, $198.86) and up $0.24 (choice, $205.73) with good demand and moderate offerings (81 loads of choice cuts, 35 loads of select cuts, 11 load of trimmings, 28 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL:
Steady. Interest is expected to increase through the morning Thursday with very limited direction seen through the complex midweek. There is likely to be some additional movement, although feedlot managers may adjust asking prices from the $115 to $116 live and $180 to $185 per cwt dressed. Bids may become more evident, but likely not much.
Sharp early losses developed Wednesday morning, but buyer interest redeveloped across the complex. Futures closed mixed, $0.12 lower to $1.02 higher. Nearby buyer support quickly moved back into the feeder cattle complex, even though the overall tone of the market remains under pressure based on losses over the last couple of sessions. August futures were able to creep above $150 per cwt, which helped to spark some additional underlying support through the entire complex. This may add some increased market interest later in the week. CME cash feeder index for 8/7 is $150.56, up $0.50.
Follow-through pressure quickly developed in lean hog trade with triple-digit losses seen across the complex ($0.65 to $1.57 lower). A combination of sharp cash market pressure and nearby lean hog futures moving to new contract lows has eroded both fundamental and technical support through the market. It is uncertain that even if buyer support does move back into the market it will be able to hold through the rest of the week, given overall pressure in the complex. Pork values continue to erode following firm triple-digit losses in rib, ham and belly primals. Pork cut-out: $70.97, down $1.08. CME cash lean index for 8/6: $64.64, down $1.40. DTN Projected lean index for 8/7: $63.17, down $1.47.
THURSDAY'S CASH HOG CALL:
Steady to $2 lower. Additional sharp losses in cash markets through the week are setting the stage for additional pressure Thursday morning. Most bids are expected to be $1.50 per cwt lower. Thursday runs are expected at 464,000 head with 133,000 head expected Saturday.
Rick Kment can be reached at firstname.lastname@example.org
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