Wednesday Closing Livestock Market Summary

GENERAL COMMENTS

Cash cattle trade started to develop in feedlot country late Wednesday morning with a few deals in the North; dressed bids of $190 to $191 per cwt. There were a few live bids at $117. Generally, asking prices should become more focused Thursday as traders concentrate on ending the month and getting ready for the upcoming holiday weekend. The Fed Cattle Exchange Auction report Wednesday listed a total of 2,554 head, with 480 actually sold, 1,868 head listed as unsold, and 206 head listed as PO. The state-by-state breakdown looks like this: Kansas 384 total head, with 100 head sold at $119.00, 159 head unsold and 125 head PO ($119.50); Nebraska 1,428 total head, with 160 head sold at $120.00, and 1,268 head unsold; Texas 536 total head, with 220 head sold at $119.75, and 316 head unsold; Colorado 81 total head, all listed as PO ($117.00); Iowa 125 total head, all unsold; other states, no test. The weighted averages were: 1-9 day delivery 320 head, with a weighted average of $119.51; 1-17 day delivery 160 head, with a weighted average of $120.00. According to the closing report, the national hog base is $0.22 lower compared with the Prior Day settlement ($81.00-$87.50) weighted average $85.59. Corn futures moved lower Wednesday in light activity. July futures were 2 cents lower. The Dow Jones Index is 143 points higher with the Nasdaq up 87 points.

LIVE CATTLE

Moderate commercial buying in live cattle redeveloped at midday Wednesday, eroding early weakness and allowing contracts to clos $0.60 to $1.10 higher. This supportive move also pushed feeder cattle trade to triple-digit higher. June live cattle futures closed at $120.25 per cwt with increased market support potential at the end of the week. Beef cut-outs: lower, $2.59 lower (select, $212.67) to down $4.48 (choice, $229.43) with light demand and heavy offerings (77 loads of choice cuts, 48 loads of select cuts, 20 loads of trimmings, 19 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

Steady. Light trade started to develop Wednesday with a small number of cattle selling in the North at $190 to $191 per cwt on a dressed basis, while live cattle traded on the Fed Cattle Exchange from $119 to $120 per cwt. This could indicate market direction through the end of the week, although active bids and asking prices are still hard to pin down given the shifting moves in futures and wide variation of losses in boxed beef values. Active cash cattle trade may be delayed until late Thursday or Friday.

FEEDER CATTLE

Feeder cattle futures posted strong, triple-digit gains Wednesday despite starting sharply lower early in the session. The abrupt market turnaround could be the turning point in the week for the cattle complex ($0.60 to $2.10 higher). Even though sharp losses developed in beef values at midday, the start of light cash cattle trade seemed to ease most cattle traders minds a bit as traders in both live cattle and feeder cattle markets quickly replaced moderate to strong losses with firm gains at closing bell. The volatility through the week continues to drive widespread market shifts in all cattle markets, and could lead to even more market uncertainty not only at the end of the week, but also through the end of June. CME cash feeder index: 6/27: $146.86, up $0.44.

LEAN HOGS

Lean hog futures ended mixed following strong early gains in nearby contracts and early support in pork values ($0.47 lower to $1.45 higher). Active trade in the pork complex continued to spark increased buyer interest in summer contracts, once again moving July futures to contract highs. July futures rose to $87.92 per cwt as traders remain focused on the ability to quickly and efficiently move pork through the system this summer. Even as active commercial interest remains focused on nearby contracts, deferred futures moved lower as traders are still focusing on production gains and concerns that long-term demand may not continue to keep pace with production levels. Carcass values surged higher on moderate volume. Gains in all primals except hams left strong support in picnics and ribs to direct the overall cutout values. Pork cut-out: $103.54 up $1.23. CME cash lean index for 6/26: $91.10, up $0.48. DTN Projected lean index for 6/27 $91.50, up $0.40.

THURSDAY'S CASH HOG CALL

Steady to $1 lower. Light to moderate pressure through the last half of the week is expected to trickle into the cash markets as traders focus on upcoming holiday schedules. The support in pork values is likely to create some additional market momentum, but may not sustain higher cash values before the holiday weekend or end of the month. Expected slaughter numbers Thursday are 435,000 head with an estimated 21,000 head likely on Saturday.