DTN Closing Livestock Comments

Closing Comments

Cash cattle activity remains quiet Tuesday afternoon. Bids are undeveloped and likely to remain that way until sometime midweek or later. Asking prices are few and far between at this point and hard to pin down. The closest we can come is hearing that a few cattle are priced in the South at $130. It is likely that it would be late Wednesday or later before cattle would be actively traded in feedlot country. The earliest cash movement will likely be seen in the Fed Cattle Exchange Auction Wednesday morning. According to the closing report, the national hog base is $0.44 lower compared with the Prior Day settlement ($51.00-$57.00, weighted average $55.07). The corn trade shifted lower in light activity. May futures posted a 7-cent loss Tuesday. The Dow Jones Index is 113 points lower with the Nasdaq down 7 points.

LIVE CATTLE

Live cattle futures squeezed out narrow gains following mixed trade most of the session ($0.22 lower to $0.35 higher). Early follow-through gains based on Monday's price support were met by aggressive position-taking Tuesday morning. The rest of the trading session saw back-and-forth price shifts as buyers and sellers seemingly squabbled over pennies and nickels in what seemed to be very limited interest with little direction. At the end of the trading session, April contracts posted a gain of 35 cents per cwt, while June contracts posted a 7-cent gain. Many contracts wandered through the trading session on either side of steady, looking for somewhere to land at one point or another through the trading session. Beef cut-outs: higher, $1.42 higher (select, $202.20) to up $1.86 (choice, $215.99) with moderate demand and light to moderate offerings (48 loads of choice cuts, 38 loads of select cuts, 7 loads of trimmings, 18 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL:

Steady to $2 higher, fueled by overall bullishness in futures trade and the expectation that beef values will continue to spark increased market interest. Traders are expected to focus on aggressive feeders looking to hold packers feet to the fire during the week. It is likely that bids will be slow to develop as packers will be once again short-bought coming into the week, but are unwilling to aggressively chase prices higher given the skyrocketing moves in futures over the past several sessions.

FEEDER CATTLE

Feeder cattle futures closed mostly lower ($0.05 lower to $0.07 higher) with traders giving up strong triple-digit gains that swept through the complex after markets opened Tuesday morning. The early buyer support was very short-lived as traders focused on overall lack of direction through the trading session. Traders had very little intention to liquidate positions, but buyer interest did not develop after the price surges seen over the last couple of market sessions. This cooling-off period seems to be more based on lack of interest than anything else. CME cash feeder index: 4/17: $136.61, up $0.49.

LEAN HOGS

Lean hog futures closed mixed ($0.85 lower to $0.82 higher) following sharp losses that developed through most of the trading session. Early pressure across the lean hog futures complex created widespread triple-digit losses in May through August futures contracts during most of the morning that put the emphasis on increased production levels during the summer months and less focus on the ability to move the abundant supply based on the strong demand that the pork industry has sustained over the past several months. But early losses were unable to hold during the last hour of trade as buyers quickly stepped into late-month contracts based on strong deferred contract buyer activity. This could help to instill additional underlying support through the middle of the week, potentially building a sense of stability across the lean hog complex. Carcass values are higher. Sharp losses in bellies and narrow pressure in picnics was offset by firm support in all other primals. Pork cut-out: $75.48 up $0.52. CME cash lean index for 4/14: $62.59, down $0.60. DTN Projected lean index for 4/17: $62.12, down $0.47.

WEDNESDAY'S CASH HOG CALL

Steady to $1 lower. Continued market pressure has developed in both cash and futures trade, allowing for packers to settle on lower bids through the middle of the week. Even though most bids will likely remain steady to weak when all the dust clears, early market calls are expected to start out with activity in the steady to $1 lower once again midweek. Packer schedules Thursday are expected to remain at 442,000 once again with 253,000 planned on Saturday.

Rick Kment can be reached at rick.kment@dtn.com

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