DTN Closing Livestock Comments

GENERAL COMMENTS: All livestock markets quickly came under pressure Thursday as traders reacted to sharp gains in grain futures, which will raise feed and production costs. Growing concerns about short-term meat demand also eroded market support. Light-to-moderate cash cattle trade started to develop Thursday afternoon in all areas. Live trade was seen at $110 in all areas, which is generally $2 per cwt lower than last week. Dressed business is just starting to develop with trade priced at $180 to $181 per cwt, $3 to $4 per cwt lower than last week. Some additional business could develop Friday after the Cattle on Feed report Friday, but prices are expected to be generally set. The National Daily Direct afternoon hog report was $1.52 lower ($66-$76 per cwt, weighted average $74.88) on 4,941 head sold. Corn futures surged Thursday with July futures up 9 cents per bushel. The Dow Jones Index was 230 points higher with the NASDAQ up 58 points.

LIVE CATTLE: Pressure developed across live cattle trade Thursday following aggressive losses in feeder cattle trade and lower cash cattle trade. Futures closed $0.32 to $0.92 lower. Concern about an increase in cattle on feed numbers in Friday's USDA report also limited buyer support. Beef cut-outs: lower, down $0.76 (select, $201.48) to down $0.87 (choice, $220.72) with good demand and moderate offerings, 103 loads (57 loads of choice cuts, 31 loads of select cuts, no loads of trimmings, 14 loads of coarse grinds).

FRIDAY'S CASH CATTLE CALL: $2 to $4 lower than last week. Light-to-moderate trade seen Thursday is expected to set the tone for the week with any additional trade Friday following the lower price trend.

FEEDER CATTLE: Feeder cattle futures saw strong losses after grain prices surged. Futures closed $1 to $1.82 lower. The rising price of grains is fueling fears of increased production and feed costs the rest of the year. The August futures contract led the complex lower, although traders may try to stabilize the market Friday following the aggressive market pressure. CME cash feeder index for 6/19 is $132.99, down $0.06.

LEAN HOGS: Sharp losses developed in lean hogs as traders tested long-term support levels. Futures closed $0.35 to $2.37 lower. Trade was sluggish throughout the day, leading to triple-digit losses in all nearby contracts. July led the complex lower, falling $2.37 per cwt. The August contract has now lost most of this week's gains, retesting support of $80.60 per cwt. A weaker close Friday would likely spark additional liquidation. Pork prices slipped slightly lower despite wide market swings in primal cuts. Pork cutout values fell $0.25 per cwt, moving to $77.44 per cwt on 318 loads. CME cash lean index for 6/18 is $79.49, up $0.23. DTN Projected lean index for 6/19 is $79.55, up $0.06.

FRIDAY'S CASH HOG CALL: Steady to $1 lower. Firm pressure is seen in all cash hog trade following increased weakness in futures Thursday. Most bids are expected steady to weak. Friday slaughter numbers are expected at 471,000 head. Saturday runs are expected at 88,000 head.

Rick Kment can be reached at rick.kment@dtn.com

(AG)

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