Cash cattle potential remained poorly defined Tuesday with virtually no bids and just a few showlists priced at $115 live and $183 dressed. According to the closing report, the national hog base is $0.34 higher ($77-$83.50, weighted average $83.16). Although corn futures closed several cents lower, contracts managed a major reversal from extreme selling action seen throughout most of the grain complex. The stock market crashed in light of new tariffs announced against China. The Dow closed 287 points lower with the Nasdaq down by 21.
The opening quote here looked threatening enough to send an ambulance full of longs to the emergency room. Triple-digit losses covered wall-to-wall as traders panicked in the face of massive losses through the entire ag commodity world. Such panic was prompted by a new order from the White House to draft a still longer list of Chinese commodities to be tariffed. At one point, bean futures fell more than 55 cents lower. But cattle traders began to find new courage near midsession. When the smoke cleared at the end of the emotional session, live futures settled 22 to 125 higher for the day and 180 to 312 above early lows. Beef cut-outs: sharply lower, off $1.01 (choice: $219.70) to $1.90 (select: $202.30) with light-to-moderate demand and moderate offerings (62 loads of choice cuts, 37 loads of select cuts, 13 loads of trimmings, 17 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL:
Steady to $2 lower. Trading potential should begin to improve at midweek with most bids and asking prices tossed on the table.
Like their live counterparts, feeder issues looked tons better on the close than they did in early trading. At the close of trading, feeder futures landed 65 to 170 points in the green with 2019 contracts outperforming 2018 issues. CME feeder index 06/18: $141.48, up $0.20.
Unfortunately, lean hog futures could not find the fortitude to recover from early selling like cattle contracts. While hog prices did manage to bounce a bit off early selling, futures still closed 35 to 185 points lower with spot July through October suffering triple-digit losses. The carcass value closed higher as higher fresh cuts offset weakness in processing items. Pork cut-out: $84.71, up $0.30. CME cash lean index for 06/15: $82.86, up $1.42 (DTN Projected lean index for 06/18: $84.05, up $1.19).
WEDNESDAY'S CASH HOG CALL:
Steady to $1 higher. Look for hog buyers to resume work at midweek with steady/firm bids. While processing margins are poor, country receipts remain slow.
John A. Harrington can be reached at email@example.com
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