DTN Closing Livestock Comments

GENERAL COMMENTS: Buyers flooded into livestock markets Monday following the announcement by the Trump administration that it had reached an agreement with Mexico over immigration and was dropping its threat of tariffs on Mexican products imported into the U.S. Cash cattle trade remained quiet despite packers appearing to remain short bought to start the week. The strong shift higher and renewed confidence in cattle futures is likely to limit packers being willing to give in to early bids. Bids and asking prices are still undefined, and may remain that way until midweek or later. The early week movement of Southern cattle may continue, but it may be Wednesday before deals develop. The National Daily Direct afternoon hog report was $0.62 lower ($67-$76.50 per cwt, weighted average of $75.27) on 5,158 head sold. Corn futures remained mixed in a narrow range with July steady. The Dow Jones Index was 78 points higher with the Nasdaq up 81 points.

LIVE CATTLE: Buyers flooded into the live cattle market, pushing futures $1.62 to $3.00 higher. The August contract led the complex higher, up $3 per cwt. This will result in an expanded trading limit of $4.50 per cwt Tuesday. With prices currently at $106.30 per cwt, a move through the week above $107.95 per cwt would indicate a technical breakthrough, which could lead to firm support through the complex over the next couple of weeks. Beef cut-outs: mixed, up $1.87 (select, $208.79) to down $0.65 (choice, $221.66) with good demand and moderate offerings, 91 loads (30 loads of choice cuts, 29 loads of select cuts, 14 loads of trimmings, 18 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL: Steady. Packers are regrouping following the futures market rally and recent cash market pressure. Bids and asking prices remain generally undeveloped and may remain that way until midweek or later.

FEEDER CATTLE: Active buying was also seen in feeder cattle Monday. Futures settled $1.87 to $2.62 higher. The focus Monday was on regaining momentum and price support following the late-week sell-off on Friday. Little has changed long term in either fundamental or technical factors, but the concern that a deal with Mexico might not be reached led to precautionary liquidation. Many of those traders quickly moved back into the market Monday in order to re-own positions given the potential long-term demand support in the cattle complex. CME cash feeder index for 6/7 is $132.26, up $0.42.

LEAN HOGS: Lean hog futures gained back most of Friday's losses, closing $0.62 to $2.85 higher. Although futures did not close high enough to trigger expanded trading limits, strong midday support helped push prices within these levels. Not only are traders relieved that tariff threats against Mexico have been dropped, but the fact that Mexico imports large amounts of pork helped to solidify demand expectations through the end of the year. The July futures contract led the complex higher, up $2.85 per cwt. Additional support may be seen later in the week. Pork cutout values added $0.98 per cwt, moving to $84.06 per cwt on 243 loads. CME cash lean index for 6/6 is $80.30, down $0.26. DTN Projected lean index for 6/7 is $79.95, down $0.35.

TUESDAY'S CASH HOG CALL: Steady to $1 lower. Limited cash market direction is expected Tuesday with the trend likely to remain steady to lower. There is likely to be some additional support following the most recent futures rally.

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

(AG)

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