The Northern tier of cattle-feeding country witnessed fairly active cash trading. According to the closing report, the national hog base is $1.76 lower compared with the Prior Day settlement ($45-$48, weighted average $45.93). Corn futures finished several cents lower, pressured by worries of higher yield estimates when the Aug. 1 crop report is released on Friday. Equities closed mixed with the Dow off 74 points and the Nasdaq up 3.
Live cattle futures were stuck in reverse for most of the trading session, checked by long liquidation and nervousness regarding late-week fundaments. Furthermore, given the way lean hog futures moved hard in the opposite direction, it's a good bet that cattle/hog spreaders took the opportunity to take some profits through unwinding. Contracts finally settled 12 to 195 points lower with nearbys losing ground to deferreds. Beef cut-outs: mixed, up $0.33 (choice: $206.06) to off $0.77 (select: $198.09) with light-to-moderate demand and moderate offerings (80 loads of choice cuts, 24 loads of select cuts, 23 loads of trimmings, 13 loads of ground beef).
FRIDAY'S CASH CATTLE CALL:
Steady to $1 lower. Thanks to decent country movement in Nebraska and Iowa on Thursday, Northern business could be done for the week. On the other hand, Southern ballparks have yet to throw out the first pitch. Cash activity in Texas and Kansas should turn out to be moderate to fairly active sometime Friday.
Following the negative lead of live futures, feeder closed 72 to 130 points lower. Note that the cash index is now 100-150 premium to most contracts. CME feeder index 08/08: $150.45, off $0.11.
Lean traders proved Thursday that nothing goes done forever. While few believe that today's bounce has much significance in itself, at least it worked a bit to relieve oversold oscillators. While spot August was curtailed by the relentless fall of the cash index, the balance of the board surged by 122 to 300 points. Carcass value closed moderately higher on Thursday, supported by better demand for fresh cuts. Pork cut-out: $71.45, up $0.48. CME cash lean index for 08/07: $63.17, off $1.47 (DTN Projected lean index for 08/08: $61.88, off $1.29).
FRIDAY'S CASH HOG CALL:
$1-$2 lower. Look for one final round of significantly lower bids in the morning to cap another ugly week in the cash market.
John A. Harrington can be reached at email@example.com
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