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Tuesday, August 26, 2014

AFTERNOON MARKET UPDATE; Aug. 26

by DTN

AFTERNOON LIVESTOCK COMMENTS
John Harrington, DTN Livestock Analyst

GENERAL COMMENTS: The cash cattle market didn't have much of a pulse Tuesday with potential bids and asking prices little more than loose talk. We think some showlists were priced around $155 in the South and $245-$248 in the North. According to the closing report, the Iowa hog base is 0.57 lower compared with the Prior Day settlement ($86.00-$95.00, weighted average $93.59). The corn market drifted another 3-5 cents lower, pressured by helpful, late-summer rains across much of the Corn Belt. U.S. stocks rose on Tuesday after better-than-expected reports (e.g., a huge jump in orders for durable goods) cast favorable light on the U.S. economy. The Dow set a new all-time high, closing nearly 30 points higher at 17,106.

LIVE CATTLE: Futures closed mostly 10-80 higher. Live futures closed moderately higher, led by soon-to-expire spot August (which still remains somewhat below recent feedlot business). The unusual discount of October at this time of year may be tied to fear that expensive beef this fall could find it tough to compete with cheapening pork. Beef cut-outs: significantly lower (choice, $248.48, off $1.21; select, $238.48, off 0.59) with light to moderate demand and moderate offerings (79 loads of choice cuts, 59 loads of select, 22 loads of trimmings, 23 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: Steady. Preliminary bids should start to surface at midweek, especially if packers want to wrap up procurement chores by Thursday.

FEEDER CATTLE: Futures closed up 12 to 92. Feeders followed their live counterparts higher thanks to short covering and suggestions of longer-term bullish fundamentals. Lower action in the corn pit was also supportive. CME cash feeder index: 08/25: 217.68, up .04.