Wednesday Closing Livestock Market Summary - Lean Hog Futures Finally Catch a Bounce

GENERAL COMMENTS

Light-to-moderate cattle trading surfaced in parts of the North with most dressed deals marked at $165-$166, $3-$4 lower than last week's weighted average basis Nebraska. A few live sales were reported in Kansas at $105, about $2 lower. According to the closing report, the national hog base is $0.92 lower ($60-$65, weighted average $63.53). The corn market continues to erode thanks to generally benign growing conditions in the late rounds before harvest. Most issues settled 3-4 cents in the red. The stock market closed higher with the Dow up 27 points and the Nasdaq better by 66.

LIVE CATTLE

At the conclusion of a fairly choppy session, live futures finished modestly higher, generally up 2 to 30. Besides the modest price progress, the session's light volume seemed to suggest that bears were at least temporarily calling off the dogs. Of course, that could quickly change if packers suddenly buy cattle Thursday/Friday much lower than they did at midweek. Beef cut-outs: mixed, up $0.33 (select, $191.12) to off $0.05 (choice, $191.72) with light-to-moderate demand and light offerings (65 loads of choice cuts, 18 loads of select cuts, 30 loads of trimmings, 25 loads of ground beef).

THURSDAY'S CASH CATTLE CALL:

Steady with the midweek market test. Look for country business to slowly build through the balance of the week at prices steady/weak with Wednesday's trade.

FEEDER CATTLE:

For the most part, feeder issues closed moderately higher, up 22 to 72. We could see additional firmness through the balance of the week as spot August works to converge with the cash index. CME cash feeder index: 08/29: $143.34, up $0.15.

LEAN HOGS:

Lean contracts closed mostly 30 to 112 higher thanks to short-covering and the correction of oversold charts. Nearby contracts gained somewhat on deferred, probably thanks more to the unwinding of bear spreads than the placement of new bull spreads. Nothing happened Wednesday of technical consequence. The carcass value closed moderately lower, pressured a bit by all primals except the ham. Pork cut-out: $84.55, off $0.32. CME cash lean index for 08/28: $75.68, off $1.08 (DTN Projected lean index for 08/29: $74.59, off $1.09).

THURSDAY'S CASH HOG CALL:

$1 lower. Look for hog buyers to stay in the same bearish groove in the morning, bidding lower and assuming the numbers will be there.