GENERAL COMMENTS: Triple-digit losses in feeder cattle led to uncertainty throughout the livestock markets Wednesday. Pressure in both feeder cattle and hog trade was due to a rally in grain futures Wednesday. Live cattle futures managed to break away from the influence of feeder cattle to bounce higher. However, this was likely due to the light trade Wednesday and may only be temporary. Cash cattle trade was starting to develop in most areas Wednesday. Light-to-moderate Southern trade was seen at $109 to $110 per cwt live basis, steady to $1 higher than last week. This may result in enough trade for the week with both sides desiring to wrap business up before the end of the day. Northern trade remains light, but was starting to pick up Wednesday afternoon. Trade at $111 to $112 live and $178 to $181 dressed was seen. This is $1 lower to $2 per cwt higher than last week. The National Daily Direct afternoon hog report was $0.69 lower ($58-$68, weighted average $67.18) on 12,508 head sold. Corn futures ended higher Tuesday in active trade with September up 17 3/4 cents per bushel. The Dow Jones Index was 179 points higher with NASDAQ up 61.
LIVE CATTLE: Despite triple-digit losses in feeder cattle, live cattle futures managed to close $0.40 to $1.35 higher. The August contract led the complex higher, rallying $1.35 per cwt late Wednesday morning. Trade was abbreviated Wednesday ahead of the Fourth of July holiday on Thursday. Trade volume remained generally light with some traders opting to exit the market early for a long holiday weekend. This led to moderate price shifts throughout the morning. Even though trade will resume Friday, activity is likely to remain light. Beef cut-outs: lower, down $0.63 (select, $195.36) to down $1.22 (choice, $219.25) with moderate demand and offerings, 150 loads (75 loads of choice cuts, 32 loads of select cuts, 12 loads of trimmings, 32 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL: Steady with Wednesday's trade. Most trade is expected to wrap up Wednesday afternoon before the holiday. There may be some clean-up activity done Friday, but the tone of the market is likely set.
FEEDER CATTLE: Feeder cattle futures closed $0.82 to $1.87 lower. Recent buyer support was quickly shattered following a 17-cent rally in corn futures Wednesday, raising concerns of higher feed costs. However, the limited trade expected in livestock markets the rest of the week may limit the long-term impact of the losses. CME cash feeder index for 7/2 is $133.94, unchanged.
LEAN HOGS: Lean hog futures settled $0.17 to $1.02 lower. Limited fundamental or technical direction developed Wednesday as traders focused more on the upcoming holiday than on short- or long-term direction. Nearby contracts saw light-to-moderate pressure as traders squared positions Wednesday. Even though markets will reopen Friday, trade is expected to be extremely light. This could result in moderate-to-wide price shifts, though the long-term impact on the market may be minimal. Pork values posted strong losses with most primals down by triple digits. Pork cutout value fell 1.73 per cwt, moving to $71.48 per cwt, on 407 loads. CME cash lean index for 7/1 is $74.01, down $0.96. DTN Projected lean index for 7/2 is $73.22, down $0.73.
FRIDAY'S CASH HOG CALL: Steady to $1 lower. Limited direction is expected Friday as packers return from the holiday. Plant runs will likely be larger Saturday in an attempt to make up for lost production Thursday, but most hogs are expected to have been sourced earlier in the week. This should keep prices mostly steady. Friday slaughter numbers are expected at 441,000 head. Saturday runs are expected near 190,000 head.
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