Thursday Closing Livestock Market Summary

GENERAL COMMENTS

Activity in feedlot country was limited to scattered sales (i.e., $120 in Kansas, $2 lower than Wednesday, $11 below last week). Some producers might have traded more cattle, but were discouraged by still lower bids. According to the closing report, the national hog base is .71 lower ($84.00-88.00, weighted average $86.09). Corn futures settled generally 6 cents lower, pressured by forecasts for mild summer temperatures over the next 10 days. The stock market closed on a mixed basis, up 2 points on the Nasdaq and off 12 on the Dow. `

LIVE CATTLE

Pressured by the imploding behavior of the cash feedlot trade and ongoing long liquidation, live contracts closed 57 to 115 lower. As spot June groans toward expiration (i.e., a week from Friday, on June 30), we are seeing some convergence. Unfortunately, all of the basis weakening has been achieved in terms of sharply lower cash sales. Beef cut-outs: sharply lower, off $1.98 (select, $216.92) to $2.54 (choice, $242.88) with light to moderate demand and offerings (63 loads of choice cuts, 32 loads of select cuts, 12 loads of trimmings, 17 loads of ground beef).

FRIDAY'S CASH CATTLE CALL:

Steady/weak with midweek losses. With producers unwilling to accept still lower bids and packers reluctant to increasing late spending, cash business may be done for week.

FEEDER CATTLE

Feeders closed moderately lower, off 7 to 120. Despite the tall premium of the cash index, nearby feeder issues lost ground to the back of the board. CME cash feeder index: 06/21: 148.18 up .11.

LEAN HOGS

Lean futures closed 32 to 235 points lower with August catching most of the selling heat. Thursday's pullback seemed to be largely tied to profit-taking and long liquidation. Bull-spreading has been a popular strategy in recent week, so we assume Thursday's relative stability of deferreds signaled the unwinding (i.e., profit-taking) of some of those spreads. The carcass value finally cooled a bit in the wake of red-hot demand. All primals were quoted lower except the butt. Pork cut-out: $99.52, off $1.57. CME cash lean index for 06/20: 88.03, up 1.48 (DTN Projected lean index for 06/21: 89.30, up 1.27). 

FRIDAY'S CASH HOG CALL

Steady-$1 lower. Look for hog buyers to resume buying efforts in the morning with steady/weak bids. With no Saturday kill plans on deck, short-term needs seem pretty well covered.