GENERAL COMMENTS: Feeder cattle futures continued to rise Wednesday, bringing the two-day rally in the spot-month contract to near $6 per cwt. The gains came as traders continue to focus on long-term feed supplies and production costs. Hog futures were mixed to mostly higher, with most support seen in deferred contracts on long-term demand expectations. Cash cattle bids of $113 to $114 per cwt live basis and $183 dressed developed across the North. Additional trade is expected, but may not develop until Thursday or Friday. Trade in the South appears to be done following early week trade at $112 to $113 live basis, $2 to $3 per cwt lower than last week. Asking prices remain at $115 live and $188 dressed. The National Daily Direct afternoon hog report was $0.31 higher ($68-$79, weighted average $76.34) on 17,734 head sold. Corn futures were sharply lower in light trade with July down 10 cents per bushel. Dow Jones Index is 207 points higher with Nasdaq up 48 points.
LIVE CATTLE: Strength in the feeder cattle market sparked limited gains in live cattle, with futures closing $0.30 to $1.22 higher. Nearby contracts saw limited support while all 2020 contracts posted triple-digit gains. Double-digit losses in corn and soybean futures are sparking renewed buyer interest in cattle as traders assess long-term feed supplies and production costs. Additional volatility could be seen, although the fundamental direction of beef prices is changing very little in early June. Beef cut-outs: lower, down $0.03 (select, $207.18) to down $0.89 (choice, $222.11) with moderate demand and offerings, 173 loads (86 loads of choice cuts, 32 loads of select cuts, 17 loads of trimmings, 39 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL: $2 lower with last week. Trade in the South is likely done for the week. Dressed sales in the North may still need to be done before the end of the week. Packers are expected to hold bids at $183 early Thursday, although trade may not develop until sometime late Thursday or Friday.
FEEDER CATTLE: Late-day support boosted feeder cattle futures $1.80 to $2.00 higher. Initially, trade was mixed, but support increased as traders focused on sharp losses in corn futures. The August contract led the complex higher, up $2 per cwt. All contracts through the end of the year are trading at $139 per cwt, leading to a flat market, which is limiting the incentive for traders to roll contracts early and is keeping volume generally light. CME cash feeder index for 6/4 is $131.88, down $0.07.
LEAN HOGS: Long-term demand expectations led to firm support in deferred lean hog futures. Overall, contracts closed mixed, $1.27 lower to $2.12 higher. Wide trading ranges were seen throughout the complex with front-month June lightly traded but showing firm losses, moving below $80 per cwt. This is aligning with cash market prices, while other summer contracts continue to hold significant premiums. The expectation that global demand will continue to keep markets from dipping to early 2019 levels is helping to sustain market support. Pork cutout values fell $0.58 per cwt, moving to $83.07 per cwt on 296 loads. CME cash lean index for 6/3 is $80.90, down $0.38. DTN Projected lean index for 6/4 is $80.67, down $0.23.
THURSDAY'S CASH HOG CALL: Steady to $1 lower. Limited cash market direction is likely Thursday with most bids expected steady to 50 cents lower. Packers are balancing keeping spending under control with still gaining access to enough market ready hogs through the end of the week. Thursday's slaughter is expected at 476,000 head. Saturday runs are expected near 51,000 head.
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