Tuesday Early Calls

| June 18, 2013
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Harold House with the Kansas City Trade Group takes a look at the latest Crop Progress and Condition report released by the USDA on Monday. Click below to hear more on the markets from KMZU’s Mandy Young and Harold House from the Kansas City Trade Group.

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Early Livestock:

Live and feeder cattle contracts should start out moderately lower, checked by light profit taking and cash uncertainty. Lean hog futures are likely to open on a mixed basis thanks to bull spreading interest and the possibility of fundamentals.

Cattle:     Cash: Steady-$2 Lower     Futures: 10-30 Lower  Live Equiv.  $136.88 + $0.69

More times than not, Tuesdays in the cash cattle trade are long on yawns and short bids. It would be shocking to see more potential this morning. It’s a good guess that early asking prices will be around $123-plus in the South and $196-197 in the North. In other words, show lists are likely to be priced $3-$4 over the board on a live basis. Feedlot managers have grown to expect selling steers and heifers well over the board. Insisting on such a strong basis could easily delay (yet again) significant cash business until the tail end of the week. Live and feeder futures are expected to pen moderately lower, pressured by profit taking and uncertain cash potential.

Hogs:       Cash:  Steady-$0.50 Higher  Futures: Mixed   Lean Equiv.  $112.32 + $0.50

Hog buyers should start work Tuesday morning with steady/firm bids. Negotiated cash receipts were quite limited yesterday, probably forcing packers to step-up procurement efforts. While plans for a Saturday kill should once again be limited, it seems likely that the weekly slaughter total will bounce back over 2 million head. Lean futures seem set to begin on a mixed basis tied to bull spreading interest and long liquidation.

Early Grains:

Grains are steady to higher early Tuesday after Monday’s Crop Progress report said only 85% of soybeans were planted and reduced the winter wheat crop rating further. The latest forecast expects more rain in Iowa, Minnesota, and Wisconsin.

Outside Markets:

Crude oil and gold are steady to lower. Dow Jones futures are higher with Federal Reserve starting its two-day meeting later on Tuesday. The Dow Jones Industrial Average closed 109.67 points higher Monday at 15,179.85. The overnight session saw the Dow Jones futures trade 37-points higher early Monday, indicating higher prices for U.S. stocks later in the morning. The overnight crude oil market was $0.14 lower at $97.63 while Brent crude was $0.15 lower at $105.32. The August gold contract lost $5.80 to close at $1,377.30, while the U.S. dollar index lost 0.07 at 80.90. Soybeans at the Dalian Exchange were higher while Malaysian palm oil contracts were slightly higher.


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