GENERAL COMMENTS: Rising grain futures, which mean higher production costs, led to losses in livestock futures markets Wednesday. Uncertainty also remains about trade with China as well as the strength of the U.S. economy and how it will affect domestic meat demand. Cash cattle trade started to develop in the North with prices at $114 live and $185 per cwt dressed. There wasn't enough trade to establish an accurate trend, but the pressure in futures likely has prompted feeders to unload cattle in the event of further late-week pressure. Bids of $112 per cwt are seen in the South, but so far, no business is reported. Asking prices are at $115 and higher live and $185 to $188 per cwt dressed. The National Daily Direct afternoon hog report was $0.83 higher ($67-$78 per cwt, weighted average $76.03) on 21,219 head sold. Corn futures firmed in light trade Wednesday with July up 2 cents per bushel. The Dow Jones Index was 43 points lower with the NASDAQ down 29 points.
LIVE CATTLE: Live cattle futures were down on spillover pressure from feeder cattle trade. Futures closed $0.40 to $1.02 lower. Traders are focused not only on higher feed prices, but also the potential that higher beef values through the end of the year will cut into beef demand. Though traders attempted to keep futures stable through early trade, widespread market weakness and pressure in adjoining hog trade led to late-day liquidation. The nearby August contract remains well above its short-term low set at the end of May. This may help contain prices within a narrow sideways trading range, but could limit upside potential. Beef cut-outs: lower, down $1.52 (select, $206.73) to down $0.24 (choice, $222.15) with good demand and moderate offerings, 136 loads (67 loads of choice cuts, 34 loads of select cuts, 11 loads of trimmings, 24 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL: Steady to $1 higher. Direction was limited at midweek, with just a few cattle sold in the North. Bids and asking prices are expected to redevelop in current ranges, although active trade may be delayed until late Thursday or sometime Friday.
FEEDER CATTLE: Feeder cattle futures continued to fall, but pulled off session lows as buyer interest redeveloped. Futures settled $0.32 to $1.30 lower. Nearby futures were down as much as $3.50 per cwt during the first couple hours of trade, but were able to pull off of lows despite continued market uncertainty. CME cash feeder index for 6/11 is $133.29, up $0.38.
LEAN HOGS: Late-day support helped minimized early losses in lean hog futures. Futures closed mixed, $1.05 lower to $0.15 higher. The December contract led the market lower, down $1 per cwt, but firmness in nearby futures trade at the end of the day allowed renewed buying to develop. The market could find support in Thursday's export sales report and from continued hope that a trade deal with China will be reached at some point. Pork prices posted firm losses following strong pressure in rib and belly cuts. Pork cutout values fell $1.25 per cwt, moving to $82.51 per cwt on 295 loads. CME cash lean index for 6/10 is $79.66, down $0.29. DTN Projected lean index for 6/10 is $79.54, down $0.12.
THURSDAY'S CASH HOG CALL: Steady to $1 lower. Packers are once again searching for market-ready hogs to fill end-of-the-week needs. The strong pullback in futures trade is not likely to weaken ending prices, with most sales steady to weak Thursday morning. Thursday slaughter numbers are expected at 475,000 head, with runs Saturday near 68,000 head.
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