Wednesday Closing Livestock Market Summary

GENERAL COMMENTS

Moderate to fairly active business developed in the cash cattle market Wednesday as producers moved to accept lower packer bids. Most live business in the South was marked at $115, generally $2-$3 lower. Dressed deals in the North were at mostly $185, generally $2 lower basis Nebraska. The national hog base closed off $0.88 compared with the prior day settlement ($73.50-$81.75, weighted average $78.91). Corn futures closed generally 2 cents plus higher in a slow trade as specs and commercials positioned ahead of new supply and demand tables due out Thursday. The stock market closed lower with the Dow off 36 and the NASDAQ down by 18.

LIVE CATTLE

Futures closed sharply lower, off 185-285. Aggressive selling through the session was stoked by long-liquidation, technical selling and outside market concerns. Note that spot August closed at its lowest point since April 11. Once reports of lower cash business began to surface, psychology on the board only worsened. Beef cutouts: steady to weak (Choice, $201.66 off $0.59, Select $196.61 off $0.25) on light-to-moderate demand and moderate offerings (76 loads of choice cuts, 30 loads of select cuts, 11 loads of trimmings, 32 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

Steady/weak with the midweek decline. Opening packer bids in the morning are likely to be on the defensive. Yet it is possible that the lion's share of business is already done for the week. The balance of showlists are likely to be priced around $116 in the South and $185-$187 in the North.

FEEDER CATTLE

Futures closed sharply lower, off 347-450. Feeder bearishness Wednesday was even more intense than that seen in the live market. Most feeder contracts closed at the lowest levels seen since late April. CME cash feeder index: 08/08: $149.48, up $0.11.

LEAN HOGS

Futures closed mixed, up 60 to off 40. Nearby contracts were once again supported by the premium status of the cash index. Additional buying interest took the form of bull-spreading and short-covering. Pork cutout: $95.06 (FOB Plant) off $0.37. CME cash lean 08/07: $85.76, off $0.34 (DTN Projected lean index for 08/08: $85.62, off $0.14).

THURSDAY'S CASH HOG CALL:

Steady to $1 lower. Look for cash hog buyers to resume procurement chores with generally weak bids, mindful of growing receipts and eroding carcass value.