The cash cattle arena was typically quiet for a Monday with packers preoccupied with the gathering of new showlists. Ready steers and heifers appear to number well below last week, especially in Kansas and Colorado. According to the closing report, the national hog base is $0.42 lower ($72-$80.30, weighted average $79.50). Corn futures failed by another 6-7 cents Monday, pressured by generally favorable growing crop conditions and further worries over global trade. Bracing for the Trump administration's next move against the Chinese economy, the stock market closed sharply lower. The Dow lost 328 points while the Nasdaq caved by 160.
Between lower feedlot sales and the bearish June 1 on-feed report (i.e., larger-than-expected May placement), the tea leaves look pretty dark on Friday. And, sure enough, the board immediately opened Monday morning in retreat gear. June and August gapped lower on the opening big time and stumbled on to close well below 40-day moving averages. Beef cut-outs: mixed, up $0.53 (choice: $217.69) to off $0.13 (select: $201.89) with moderate demand and offerings (56 loads of choice cuts, 24 loads of select cuts, 11 loads of trimmings, 13 loads of ground beef).
TUESDAY'S CASH CATTLE CALL:
Steady to $2 lower. Barring the development of attractive basis opportunities, the cash trade should remain at a standstill Tuesday with bids and asking prices poorly defined.
Feeder futures followed the bearish lead of their live counterparts and closed 157 to 342. Spot August quickly plunged below its 100-day moving average, yet managed to stay above the 40-day moving average. On an estimated run of 8,000 head (near steady with last week and up from 5,823 in 2017), Oklahoma City sold feeder steers and heifer unevenly steady. CME feeder index 06/22: $142.28, off $0.29.
Lean issues closed 12 to 177 lower with most of the bearish heat applied to spot July through October (i.e., off 115 to 177). Carcass value closed higher, supported by improving demand for processing items and butts. Pork cut-out: $86.44, up $0.80. Pork cut-out: $84.85, off $0.19. CME cash lean index for 06/21: $86.17, up $0.38 (DTN Projected lean index for 06/22: $86.20, up $0.03).
TUESDAY'S CASH HOG CALL:
Steady to $1 lower. Look for steady/weak cash bids on Tuesday with packers looking for ways to improve dismal margins.
John A. Harrington can be reached at firstname.lastname@example.org
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