Monday Closing Livestock Market Update

Closing Comments

For the most part, the cash cattle trade went untested Monday as packers primarily focused on the distribution of new showlists. Ready numbers are mixed, smaller in Texas, Kansas, and Colorado, but larger in Nebraska. Overall, the offerings remains quite manageable. According to the closing report, the national hog base is $0.08 lower ($49.00-$54.75, weighted average $53.41). Corn futures settled 1-2 cents higher, mildly supported by wet forecasts and the possibility of greater planting delays ahead. Cheered by victory of market-friendly forces in the French election, the stock market closed higher with the Dow up 216 points and the Nasdaq positive by 73.

LIVE CATTLE

News of record-large March placement activity did not play well here, despite the fact that deferred issues started the week nearly $20 below spot cash. Monday's bearish sell-off seemed long on emotion and short on reason with contracts settling generally 80 to 185 lower. Beef cut-outs: significantly higher, up $0.40 (select, $204.29) to $1.51 (choice, $218.67) with moderate-to-good demand and moderate offerings (56 loads of choice cuts, 25 loads of select cuts, 19 loads of trimmings, 14 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL:

Steady. Tuesday should be typically quiet as both sides sit back and get a better sense of the significance of Monday's board action (e.g., isolated, one-day reaction or a biggest signs of market shift?).

FEEDER CATTLE

Feeders followed their live counterparts sharply lower with most issues settling off 30 to 180. Damage was most limited in spot April thanks to the premium status of the cash index. On an estimated run of 9,000 head (up from 5,699 last week and near steady with 2016), Oklahoma City sold feeder steers and heifers $1-$3 higher, with instances of $5 higher. CME cash feeder index: 04/21: $139.41 up $1.36.

LEAN HOGS

Nearby futures got off to the best start seen in weeks, closing 65 to 137 points higher. Perhaps more traders are finally willing to anticipate a seasonal swing toward more manageable supplies. Summer issues may have also benefited from the unwinding of cattle/hog spreads. The carcass value stumbled out of the new week gate, pressured by softer demand for belly, ham, and rib cuts. Pork cut-out: $74.49, off $0.98. CME cash lean index for 04/20: $61.10, off $0.49 (DTN Projected lean index for 04/21: $60.49, off $0.61).

TUESDAY'S CASH HOG CALL

Steady. Look for hog buyers to resume work in the morning with basically steady bids.