Wednesday Closing Livestock Market Summary - Cattle Futures Slump Lower Thanks to Long Liquidation, Fear of Topping Beef

GENERAL COMMENTS

The cash cattle market remained slow to start at midweek with only scattered bids (e.g., $192 in the North/$120 in the South) and poorly defined asking prices (e.g., $195 plus in the North/$128-$130 in the South) evident across the feeding area. According to the closing report, the national hog base is $1.03 higher ($57.50-$62, weighted average $61.30). The corn market closed fractionally lower as traders slowly positioned ahead of new numbers from the World Board to be issued Thursday. The stock market closed higher with the Dow up 182 points and the Nasdaq better by 73.

LIVE CATTLE

Live cattle opened higher thanks in part to short-coverers impressed with Tuesday's reversal. Unfortunately, the bullish glue didn't stick very well. The market was soon overcome once again with selling interest tied to cash nervousness and fears that the best of seasonal beef demand could be close at hand. Prices settled 30 to 110 lower with August falling back below its 40-day moving average. Beef cut-outs: mixed, up $0.03 (choice: $230.96) to off $0.98 (select: $208.95) with light-to-moderate demand and offerings (58 loads of choice cuts, 36 loads of select cuts, 23 loads of trimmings, 20 loads of ground beef).

THURSDAY'S CASH CATTLE CALL:

Steady. Cash business will clearly be a late bloomer this week with moderate volume developing either on Thursday or Friday.

FEEDER CATTLE:

Feeder issues also had difficulty dealing with early success. Most months settled 100-200 points below session highs. The August contract slipped to its lowest close since April 11. Generally speaking, the feeder board closed off 42 to 102. 05/08: $138, up $0.09.

LEAN HOGS:

Hog paper was fairly lackluster throughout the trading session with neither bulls nor bears acting interested in pressing their case. When everything was said and done, prices settled on a mixed basis, up 27 to off 100. The carcass value closed moderately higher, supported by all primals except the loin. Pork cut-out: $72.04, up $0.74. CME cash lean index for 05/07: $63.33, up $0.04 (DTN Projected lean index for 05/08: $63.55, up $0.22).

THURSDAY'S CASH HOG CALL:

Steady to $1 higher. The spring cash trade is finally on a bit of a roll as the seasonal offering gradually grows smaller. Look for another round of firm packer bids in the morning.