GENERAL COMMENTS: Through the quiet start of the week, sellers have kept their offers (around $114 in the South and $187 plus in the North) firm above last week's prices: $113 live and $182 dressed. No significant trade volume has been noted yet, and not even a token bid was floated Tuesday. According to the closing report, the national hog base was $0.75 higher ($57-$72, weighted average $69.36). Corn futures closed 5 3/4 cents lower alongside steeper losses in the soy complex (soybean meal down $3.50 per ton). The stock market dropped 10 points in the S&P 500, but the index remains above 3,000.
LIVE CATTLE: Compared to the carnage in feed grain and soybean prices in recent days, the losses in live cattle futures on Tuesday seemed mild: down only $0.275 in the August contract. A consistent series of higher daily lows suggest the chart is still in a short-term uptrend. Last week's stronger performance in cash cattle trade, plus the anticipation of a Cattle on Feed report coming this Friday, may sustain that upward bias in futures trade. Beef cut-outs: lower, down $0.34 for choice at $212.93 and down $0.05 for select at $189.16, with light-to-moderate demand and moderate offerings.
WEDNESDAY'S CASH CATTLE CALL: Steady to $2 higher. Through the quiet start of the week, sellers have kept their offers (around $114 in the South and $187 plus in the North) firm above last week's prices: $113 live and $182 dressed.
FEEDER CATTLE: A sudden burst of upward movement in the U.S. Dollar Index sent most commodity futures prices lower Tuesday, and feeder cattle were no exception. The October contract saw the most selling pressure and ended the day down $0.75. Meanwhile, physical business at sale barns this week may have calmed down somewhat since last week's bullishness, with fewer locations reporting notably hot weighted average prices. CME cash feeder index for 7/15 is $141.16, up $0.70.
LEAN HOGS: The premium for August lean hog futures continues to erode, with the spread between August and October narrowing $2.45 Tuesday and closing at only $3.75. As another benchmark for the dwindling bullishness of the August contract, it dropped below the $80 level Tuesday. However, once past that timeframe, the charts for deferred lean hog contracts all remain in a short-term upward trend, and primal values are showing strength this week. Pork cut-out: $75.80, up $2.90. CME cash lean index for 07/12: $70.73, unchanged (DTN Projected lean index for 07/15: $70.62, down $0.11).
WEDNESDAY'S CASH HOG CALL: Steady. Seasonally lighter hogs have relieved some of the pressure from this market, and futures are on an upswing.
Elaine Kub can be reached at firstname.lastname@example.org
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