GENERAL COMMENTS:
Livestock futures ended mixed in light trade Wednesday with buyers looking for increased movement later in the week. The firm tone seen in cattle and hog trade remains intact, but limited trade volume may allow for increased movement. Cash cattle markets remain generally undeveloped following a few bids developing at $109 per cwt live basis. Asking prices continue to develop at $113 live basis and $186 and higher. Trade is expected to develop sometime Thursday or Friday, but the current wide gap between asking prices and bids will need to narrow before any agreements develop. The National Daily Direct afternoon hog report was $1.96 higher ($67-$85, weighted average $80.88) on 10,446 head sold. Corn futures closed lower in sluggish trade with September futures down 1 1/2 cents per bushel. The Dow Jones Index was 79 points lower with the NASDAQ up 70 points.
LIVE CATTLE: Live cattle futures closed $0.15 lower to $0.22 higher. Firm support early in the week opened the door for light position-taking early Wednesday. This kept most buyers on the sidelines most of the session, although most contracts posted single-digit gains as initial selling pressure eroded. This is likely to solidify prices at current levels, although the lack of buyer support and uncertainty surrounding beef and cash values may limit price moves higher over the near future. Beef cut-outs: lower, down $0.29 (select, $189.42) to down $0.18 (choice, $213.60) with light demand and heavy offerings, 141 loads (53 loads of choice cuts, 34 loads of select cuts, 25 loads of trimmings, 28 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL: Steady. Limited activity is expected Thursday morning. There may be some additional interest through the day, although trade may be delayed until late in the week.
FEEDER CATTLE: After sluggish movement early in the day, feeder cattle futures rallied to close $0.05 to $0.62 higher. The August contract led the complex higher with a 62-cent rally as traders look to build on recent market support and test short-term resistance. This may add some additional volatility to the complex, although tight trading ranges in all nearby contracts are minimizing the desire to roll positions at this point. CME cash feeder index for 7/23 is $136.71, down $0.23.
LEAN HOGS: Lean hog futures settled $0.95 lower to $0.65 higher. Limited direction developed Wednesday as traders focused more on adjusting positions after early week gains. Prices bounced higher and lower throughout the session. The August contract was able to hold limited gains, while October posted firm losses late in the session as traders pulled back from previous gains. The bullish trend continues, although recent skyrocketing prices are leaving the market open for a price correction. Pork values firmed in active trade following mixed primal market shifts. Pork cutout value gained $0.83 per cwt, moving to $81.43 per cwt, on 308 loads. CME cash lean index for 7/22 is $74.29, up $1.02. DTN Projected lean index for 7/23 is $75.58, up $1.29.
THURSDAY'S CASH HOG CALL: Steady to $2 higher. Continued support is expected to develop Thursday with most bids expected $1 per cwt higher, although wide ranges in bids are likely to be seen through the end of the week. Thursday slaughter numbers are expected at 476,000 head. Saturday runs are expected at 9,000 head.
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