The cash cattle trade looked like an essential no-show throughout the day with just a few scattered bids of $173 reported in parts of the North. Initially, asking prices were poorly defined. Yet we were surprised to see one large string of 5,000 head reported sold in the North by Mandatory at $109.50 (nearly $2 lower than last week's weighted average basis Nebraska). According to the closing report, the national hog base is $1.04 lower compared with the Prior Day settlement ($40-$44.00, weighted average $42.69). Corn futures surged higher by as much as 6 cents, supported in part by aggressive strength in soybean meal.
Live futures closed higher, up 7 to 77. 2018 contracts generally outperformed deferreds. Having said that, late-summer and early fall bulls remain skittish in terms of getting very close to the cash feedlot trade. Beef cut-outs: sharply higher, up $1.21 (choice: $209.64) to $1.61 (select: $201.67) with moderate-to-good demand and light-to-moderate offerings (45 loads of choice cuts, 24 loads of select cuts, 5 loads of trimmings, 17 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL:
Steady to $1 higher. Market watchers could start to see more initial bids around the feeding circuit. Yet our guess is that significant trade volume will not surface until Thursday or Friday.
Neither side showed much spunk Tuesday. The close proved as lackluster as the opening. Light bull-spreading helped nearbys settle on a stronger basis than deferreds. Yet the total price range at the end of the session (i.e., up 27 to off 80) promised virtually nothing in terms of technical significance). CME feeder index 08/13: $150.64, off $0.48.
Lean futures closed mostly higher with deferreds generally outperforming nearbys (i.e., up 7 to 112). Only expiring spot August settled in the red (i.e., $55, off $0.52). New spot October will take the point on Wednesday approximately $5 below the cash index. The pork carcass value dropped more than a buck Tuesday, pressured by soft demand for bellies, picnics and loins. Pork cut-out: $69.74, off $0.06. 08/10: $58.28, off $1.76 (DTN Projected lean index for 08/13: $56.81, off $1.27).
WEDNESDAY'S CASH HOG CALL:
$1-$2 lower. Hog buyers should remain on the defensive at midweek with the cash trade further pressured by ample market hog offerings and struggling product demand.
John A. Harrington can be reached at email@example.com
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