DTN Closing Livestock Comments

GENERAL COMMENTS

Activity in the cash cattle arena was naturally limited to the distribution of new showlists. Ready numbers appear to be generally larger than last week, especially in Kansas. According to the closing report, the national hog base is $1.39 higher ($70-$79.50, weighted average $78.02). Corn futures crashed lower with most contracts slumping as much as 9-10 cents. The stock market closed somewhat higher with the Dow up 5 points and the Nasdaq better by 14.

LIVE CATTLE

Live issues tried to rally in the early rounds and even held moderate gains for several hours. But, in the end, long liquidation and profit-taking surfaced enough to cause prices to settle 75 to 160 lower. By reversing this way late in the day, the board essentially turned its head on surging feedlot business on display late Friday. Apparently, many specs and commercials remain nervous about the potentially bearish combination of growing beef supplies over the next several months and inadequate midsummer beef demand. Beef cut-outs: substantially lower, off $0.38 (select: $202.80) to $1.08 (choice: $225.13) with light-to-moderate demand and moderate offerings (50 loads of choice cuts, 23 loads of select cuts, 7 loads of trimmings, 17 loads of ground beef).

TUESDAY'S CASH CATTLE CALL:

Steady to $2 higher. We should be looking at a typically slow Tuesday with bids and asking prices remaining poorly defined.

FEEDER CATTLE:

Feeder contracts essentially followed the same dipsy-do pattern evident in the live futures market. Prices eventually settled 20 to 132 points lower. If feeders held up a bit better than their live counterparts, the credit probably goes to the supporting implications of breaking corn prices. On an estimated run of 9,500 head (down from 12,696 last week but larger than 7,594 counted in 2017), Oklahoma City sold feeder steers and heifers mostly $1-$4 higher. Steer calves were not well tested, but their heifer mates were marked $2-$5 higher. CME feeder index 06/08: $140.61, up $0.12.

LEAN HOGS:

Lean hog futures closed on a mixed basis with prices up 27 to off 157. Spot June closed modestly higher, supported by the impressive advance of the cash index. Note that June is scheduled to expire on Thursday, June 14. July through October collapsed with triple-digit gains, checked by commercial selling and nervousness tied to the possible negative impact of tariffs and the June 1 update (the quarterly inventory will be released on the 28th) of herd expansion. Carcass value jumped solidly higher, supported by all primals, but especially the rib, butt and belly. Pork cut-out: $80.44, up $0.97. CME cash lean index for 06/07: $74.57, up $1.07 (DTN Projected lean index for 06/08: $75.79, up $1.22).

TUESDAY'S CASH HOG CALL:

$1-$2 higher. Expect another strong round of cash bids in the morning, encouraged by both tighter country offerings and higher carcass value.

John A. Harrington can be reached at john.harrington@dtn.com

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