Wednesday Closing Livestock Market Summary - Front-End Lean Hog Futures Remain on Bullish Roll

GENERAL COMMENTS

Cash cattle potentially started to take shape at midweek with more bids and asking prices posted on the field of play. Yet the enormous spread between buying and selling ideas (e.g., $110 bid versus $118 asked basis the South) suggested that significant trade volume could once again be delayed until Friday. According to the closing report, the national hog base is $1.65 higher ($74-$83, weighted average $80.82). The corn market slipped a penny plus lower, checked by some profit-taking on the heels of Tuesday's strong pop. The stock market closed 119 points lower with the Nasdaq off 8.

LIVE CATTLE

Live contracts finished moderately lower, easing for the most part 20 to 60 lower. The board refuses to believe in the success of early summer cash, convinced that the shoe will soon drop, pulled lower by the bearish gravity of both growing supplies and faltering beef demand. Time will tell. Beef cut-outs: significantly lower, off $1.02 (choice: $223.90) to $1.09 (select: $202.30) with light-to-moderate demand and moderate offerings (69 loads of choice cuts, 39 loads of select cuts, 15 loads of trimmings, 21 loads of ground beef).

THURSDAY'S CASH CATTLE CALL:

Steady to $2 higher. While the big spread between bids and asking prices could narrow some Thursday, we don't expect significant country movement to surface until sometime Friday.

FEEDER CATTLE:

Feeders closed 15 to 130 points lower with the nearbys holding up better than deferreds. The spread between the cash index and spot August has really tightened in recent weeks with the former doing most of the work. CME feeder index 06/12: $141.02, up $0.07.

LEAN HOGS:

With the exception of June, lean hog futures closed with impressive progress, mostly up 22 to 212. Bull-spreading and strong fundamentals especially fueled advances in July through October. June will expire Thursday at high noon. Carcass value closed higher, supported by strength in the loin, rib and belly primal. Pork cut-out: $81.69, up $0.39. CME cash lean index for 06/11: $77.18, up $1.39 (DTN Projected lean index for 06/12: $78.71, up $1.53).

THURSDAY'S CASH HOG CALL:

$1-$2 higher. Look for more cash strength to surface in the morning as buyers continue to chase tightening receipts.