Alongside the plateau in live cattle futures, the cash cattle trade that's developed so far this week is a somewhat mixed bag. Light trade was reported late Wednesday morning in the South at $111, steady to $1 lower than last week. However, other asking prices remain firm around $114 live and $186 plus in the North, where eastern Nebraska business was clocked at $185 late Tuesday and there were other deals by a regional in parts of Nebraska at $183 for delivery two weeks out and $185 for delivery the week of Aug. 5. According to the closing report, the national hog base was $1.10 higher ($57.00 to $74.00, weighted average $70.43). Corn futures closed 3/4 cents higher. The stock market pulled back 19 points in the S&P 500.
Lower futures prices Wednesday, down $0.10 in the August live cattle contract, broke the short-term pattern of higher daily lows. Futures traders may be hesitating to extend the market's gains any further ahead of Friday's monthly Cattle on Feed report, which is expected to show the overall supply still growing but June placements and marketings lighter than last year (97%, the average amid a wide range of estimates). Also, the semi-annual Cattle Inventory report is expected to show a no-longer-expanding breeding herd and calf crop (the average of estimates is at 100%). Beef cutouts are lower, down $0.36 for choice at $212.57 and down $0.82 for select at $188.34, with light demand and heavy offerings.
THURSDAY'S CASH CATTLE CALL: Steady to $1 higher.
Some asking prices remain firm at $114 live and $186 plus dressed, but sellers may become more accepting in an uncertain supply scenario.
Relatively calm outside markets allowed the feeder cattle futures market to concentrate on its own line of business -- namely, correcting the overheated gains from earlier this month. The nearby August contract closed the day down $0.475, and the October contract lost $1.10. CME cash feeder index for 7/16 is $141.01, down $0.15.
The August lean hog contract traded on both side of $80 Wednesday, but ultimately ended at the session high with impressive gains of $2.95, taking the contract to $82 per cwt. Deferred contracts made similarly large gains and continued their uptrend for the fifth straight session, with the October contract, for instance, closing up $2.525. This outlook for higher hog prices into 2020 may be based on some fresh optimism about U.S.-China trade troubles eventually getting sorted out. Pork cutouts were $76.48, up $0.68. CME cash lean index for 07/15: $70.62, down $0.11 (DTN Projected lean index for 07/16: $70.79, up $0.17).
THURSDAY'S CASH HOG CALL: Steady to $1 higher.
Seasonally lighter hogs have relieved some of the pressure from this market, and futures are on an upswing.
Elaine Kub can be reached at email@example.com
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