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Cattle futures contracts close sharply lower

The cash cattle trade was not tested on Tuesday afternoon with bids few and far between. Preliminary asking prices appear to be around 160.00 to 162.00 in the South and 255.00 plus in the North according to DTN. Significant trade volume will probably be delayed until sometime on Thursday or Friday. The kill totaled 117,000 head, 2,000 more than last week, but 4,000 greater than last year.

Boxed beef cutout values closed higher on moderate demand and light to moderate offerings. Choice beef was up 1.80 at 249.48, and select was 1.39 higher at 242.62.

Chicago Mercantile Exchange live cattle contacts settled 17 to 142 points lower as light to moderate pressure developed through the complex with the August contract suffering the most significant losses. The market was pressure by long liquidation, profit taking and technical selling. August settled 1.42 lower at 153.52, and October was down .70 at 155.97.

Feeder cattle futures suffered sharp losses on Tuesday from 125 to 210 points lower with the focus on the softness through the entire cattle complex early in the week. DTN analyst Rick Kment says it is uncertain at this point if this current market retraction will be enough to set a top in the market, and start the trend lower, or is it just a short term market correction that will help draw buyers back into the market. August settled 2.10 lower at 215.90, and September was down 1.75 at 217.47.

Feeder cattle receipts on Monday at the Russell, Iowa feeder cattle auction totaled 1933 head. Compared to the sale two weeks ago, feeder steers were mostly 4.00 to 10.00 higher and heifers were mostly 5.00 to 12.00 higher. Trade was active and demand was very good. Feeder steers medium and large 1, 202 head averaging 733 pounds brought 236.51 per hundredweight for a load. 98 heifers weighing 714 averaged 212.39.

Lean hogs settled 42 points higher to 197 lower. Hogs traded mixed in a wide trading range. Traders concentrated on the pressure in the August and October contracts that comes back to the uncertainty about an overbought market and the ability to sustain demand through the remainder of the summer and early fall months. July settled .40 higher at 132.20, but August was down 1.97 at 129.85.

There was slow to moderate hog market activity with moderate demand. The Iowa/Minnesota direct trade was .25 lower at 130.40 weighted average on a carcass basis, the West was up .13 at 130.03, and Eastern barrows and gilts were not reported due to confidentiality. Missouri direct base carcass meat price was steady to 3.00 higher from 120.00 to 122.00. Hogs at Midwest markets closed steady to 1.00 higher from 86.00 to 91.00.

The pork carcass cutout value FOB plant was .19 lower at 134.33. Most cuts were lower with the exception of hams, bellies and rib primals.

Hog carcass weights have been extremely heavy as producers seek to maximize the pounds they bring to market. While weights have started to come down, they still remain about 4.8% above year ago levels. Furthermore, summer heat has been relatively mild so far.

The hog kill was estimated by USDA at 403,000 head, 8,000 less than last week, but 2,000 more than last year.

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