GENERAL COMMENTS
Moderate-to-active cash trade developed early Thursday morning in the South with feedlot sales generally $4 higher than last week ($121-$122). On the other hand, country business never got off the ground in the North, especially once cattle futures fell out of bed. According to the closing report, the national hog base is $3.16 ($48-$60, weighted average $57.33). Corn futures closed fractionally lower at the conclusion of a lackluster session. Planting conditions are expected to warm over the week ahead. The stock market closed lower with the Dow off 83 points and the Nasdaq down by 57.
LIVE CATTLE
Although live issues opened some higher, and although the cash trade produced definitely bullish news near midmorning, board bulls could not avoid breaking hard near midsession and closed with triple-digit losses (i.e., off 117 to 227). Spot April actually stumbled into a key reversal. The historically huge spread between April and June just keeps inflating, a definite sign of the summer's deep supply worries. Beef cut-outs: lower, off $0.09 (select: $198.48) to $0.30 (choice: $211.34) with light-to-moderate demand and moderate-to-heavy offerings (101 loads of choice cuts, 49 loads of select cuts, 8 loads of trimmings, 28 loads of ground beef).
FRIDAY'S CASH CATTLE CALL:
Steady/firm with Thursday. While cash business in the South may be done for the week, Northern buyers and sellers will have to come to terms sometime Friday. Showlists will probably start out priced around $192-$194 on a dressed basis.
FEEDER CATTLE:
Feeders crashed along with their lean counterparts, closing 118 to 235 in the red. The August chart looks especially frustrated. Once again, the late-summer contract was stopped by the tough combination of the 50% retracement of the first-quarter price drop and the 40-day moving average. CME cash feeder index for 04/18: $137.12, off $0.78.
LEAN HOGS:
Lightly traded May closed 30 points higher, but the balance of the lean field settled 20-52 lower. Despite Thursday's light round of profit-taking, summer contracts seem well positioned to run toward new highs in the near future. July and August must master chart resistance around 100-day moving averages (i.e., $81.41 and $81.26, respectively). Carcass value closed near steady, marginally pressured by softer demand for ribs, picnics and bellies. Pork cut-out: $68.42, off $0.04. CME cash lean index for 04/17: $55.05, up $1.03 (DTN Projected lean index for 04/18: $55.97, up $0.92).
FRIDAY'S CASH HOG CALL:
$1-$2 higher. The spring's cash hog trade is clearly on fire, and there is little reason to think the bullish flame will die down in the morning.
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