Generally speaking, feedlot country remained at a standstill for most of the day with bids and asking prices separated by a country mile (e.g., $108-$110 vs. $115, basis the South). We are picking up some late business with $110 paid in the South (steady/firm with last week's weighted average) and $110-$111 paid in parts of Nebraska (steady to $1 higher). According to the closing report, the national hog base is $1.88 higher ($60-$70, weighted average $68.77). Corn futures settled fractionally higher at the conclusion of a quiet trading session. The stock closed significantly lower as trade war talk re-fired. The Dow slumped 251 points lower with the Nasdaq off 20.
Despite limit advances in spot June and August on Wednesday, traders could muster precious little follow-through in the opening rounds. Profit-taking and beef demand quickly surfaced to strip away a good part of the midweek surge. When the dust settled, live contracts closed 30 to 107 lower with spot June holding up better than deferreds. Beef cut-outs: mixed, up $0.09 (select: $204.47) to off $0.48 (choice: $228.20) with light-to-moderate demand and moderate-to-heavy offerings (80 loads of choice cuts, 42 loads of select cuts, 16 loads of trimmings, 16 loads of ground beef).
FRIDAY'S CASH CATTLE CALL:
Steady to $2 higher. Look for the cash cattle trade to turn moderate to fairly active Friday as well-margined packers aggressively shop for early June slaughter needs.
Feeder issues declined by 22 to 115 with new spot August catching most of the corrective selling. Given the fact that August has taken the point nearly $13 above the spot cash index, the board could prove to be especially vulnerable to any bearish news that rolls down the summer pike. 05/30: $134.82, off $0.04.
Summer bulls tried early in the session to extend the midweek rally, but technical-selling energy soon resurfaced. June through August were repelled by resistance near 100-day moving averages. The push-back in August was substantial enough for the late-summer issues to settle back below their 40-day moving averages. The board was further pressured by ideas that NAFTA talks were breaking down as both Canada and Mexico announced counter tariffs vis-a-vis the imposition by the U.S. tariffs on steel and aluminum from the European Union, Canada, and Mexico. The carcass value blasted more than $2 higher thanks to much better demand for hams, bellies, loins and picnics. Pork cut-out: $78.22, up $2.17. CME cash lean index for 05/29: $69.50, up $0.04 from 05/25 (DTN Projected lean index for 05/30: $69.63, up $0.13).
FRIDAY'S CASH HOG CALL:
$1-$2 higher. Late-week cash should have a definite sizzle thanks to both tightening receipts and improving product demand.