Initially spooked by lower-trending live futures, feedlot managers quickly moved to accept lower bids and capture attractive basis opportunities. Most live sales were marked at $126, $2 lower than last week. Some business was reported in Colorado and western Nebraska at $127, roughly $1 lower than last week. Dressed trade in the North was primarily marked at $204, some lower from last week's weighted average basis Nebraska (i.e., $204.44). Generally speaking, volume totals seemed moderate, though parts of the South could be done for the week. According to the closing report, the national hog base is $0.07 lower ($56.00-$63.50, weighted average $62.38). The corn market closed 2-4 cents higher, supported by dry conditions in U.S. wheat country and Argentina. Stocks closed lower with the Dow off 381 points and the Nasdaq down by 57.
While live contracts seemed to fly all over the place through the volatile session, prices settled mostly 32 to 97 cents lower when all the shouting stopped. Spot February expired Wednesday at $127.50, off 52 cents. New spot April will take the point Thursday approximately $3 below the cash feedlot trade. Furthermore, April slipped below both the 40-day and 100-day moving averages on the close. Beef cut-outs: moderately higher, up $0.31 (select: $215.10) to $0.51 (choice: $221.03) with moderate demand and light offerings (59 loads of choice cuts, 21 loads of select cuts, 15 loads of trimmings, 15 loads of ground beef).
THURSDAY'S CASH CATTLE CALL:
Steady with Wednesday's decline. Late-week business will hinge on actual trade volume totals established on Wednesday. Mandatory totals in the morning will be important to check out.
Price swings were aggressive here as well with most contracts defining ranges as large as 200-300 points. At the close, prices settled off 65 to 220 points. Spot March closed at $144.75, its poorest finish since Jan. 25. CME cash feeder index: 02/27: $147.94, up $0.18.
Spring and summer lean hog futures broke hard Wednesday, off 102 to 272 on the close. Far deferreds also finished in the red, but on a more moderate basis. Spot April gapped lower on the opening and closed at its lowest point since Sept. 1. June and July settled well under 100-day moving averages. The carcass value crashed big time Wednesday, hammered by sharply lower belly sales (i.e., off $8.84). Softer demand for loins and hams was also a bearish factor. Pork cut-out: $79.53, off $0.74. CME cash lean index for 02/26: $68.83, off $0.49 (DTN Projected lean index for 02/27: $68.57, off $0.26).
THURSDAY'S CASH HOG CALL:
Steady to $1 lower. Expect hog buyers to open with defensive bids in the morning as they stew over dissipating carcass value.