Thursday Closing Livestock Market Summary - Cattle Paper Erupts With Triple-Digit Gains

GENERAL COMMENTS

Buyers and sellers barely moved a muscle through the day, at least nothing suggestive of serious trade potential. We did see a small handful of lower bids around $102 in the South and $163 in the North. But higher futures clearly encouraged feedlot managers to dig in their heels with stronger asking prices. According to the closing report, the national hog base is $0.83 lower ($55-$61, weighted average $59.93). The corn market stumbled a nickel plus lower, pressured by ideas of growing harvest potential. The stock market closed mixed with the Dow off 22 points and the Nasdaq up 4.

LIVE CATTLE

Although live contracts closed mostly 65 to 152 higher, Oct and Dec finished as much as 130 to 145 below early session highs. We really seemed to be locked in a trading range. In fact, spot Oct settled smack-dab in the middle between its eight-day moving low and its 10-day moving high. Beef cut-outs: moderately lower, off $0.51 (select, $190.16) to $0.80 (select, $190.16) with light-to-moderate demand and moderate offerings (81 loads of choice cuts, 24 loads of select cuts, 32 loads of trimmings, 15 loads of ground beef).

FRIDAY'S CASH CATTLE CALL:

Steady to $2 lower. Buyers and sellers have backed themselves into a corner, but someone will have to blink first on Friday before leaving for the weekend.

FEEDER CATTLE:

Feeders closed 150 to 245 higher, supported by strength in deferred live contracts, the premium of the cash index, and significant weakness in the corn trade. While spot September closed near the top end of a month-old trading zone, it remains checked by multiple levels of overhead resistance (e.g., 40-day and 100-day moving averages). CME cash feeder index: 09/06: $147.05, up $1.20.

LEAN HOGS:

Lean contracts gapped lower on the opening and pretty much remained on the defensive through the entire session. Prices settled mostly 45 to 210 lower with the first three contracts attracting the most selling interest. Carcass value continued to slide lower, pressured Thursday by soften demand for picnic, belly, loin and ham cuts. Pork cut-out: $82.81, off $0.86. CME cash lean index for 09/05: $70.33, off $1.03 (DTN Projected lean index for 09/06: $69.37, off $0.96).

FRIDAY'S CASH HOG CALL:

$1-$2 lower. Look for hog buyers to generally remain on the defensive Friday morning. Yet given ambitious Saturday kill plans around 375,000 head, some may still have some late-week slaughter needs.