Tuesday Closing Livestock Market Summary

Closing Comments

The fed cattle trade existed only in theory Tuesday with virtually no definition in terms of bids and asking prices. Improving country psychology was almost palpable thanks to the significant progress in cut-outs and futures. According to the closing report, the national hog base is $0.30 lower ($54.00-$58.50, weighted average $56.89). Corn futures settled fractionally lower, holding up reasonably well in the face of larger estimates of South American production. Equities closed mostly lower with the Dow off 6 points and the Nasdaq down by 14.

LIVE CATTLE

While live contracts only traded moderately higher through midmorning, bulls really turned up the heat when the midday report quoted boxes sharply higher. The board suddenly surged higher on ideas that cash premiums may not be going away anytime soon. Prices closed 110 to 215 higher with August and December setting new contract highs. Beef cut-outs: sharply higher, up $1.91 (choice, $209.37) to $3.00 (select, $99.60) with moderate to good demand and moderate offerings (58 loads of choice cuts, 37 loads of select cuts, five loads of trimmings, 18 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL:

Steady to $2 higher. Preliminary packer inquiry could start to surface at midweek, but significant trade volume will probably be delayed until Thursday or Friday.

FEEDER CATTLE

For the second consecutive session, all feeder months soared to new contract highs. Closing prices advanced by 187 to 285, supported by technical buying and commercial bullishness. CME cash feeder index: 04/10: $133.64, up $0.33.

LEAN HOGS

Once again, nearly all lean contracts scored moderate progress (i.e., up 22 to 870 except spot April. The lead month (scheduled to expire on Friday) closed 67 points lower as traders continue to anticipated further erosion in the cash index. Carcass value took on the chin Tuesday with all of the loss tied to a $11.94 drop in the belly primal. Pork cut-out: $75.17, off $1.53. CME cash lean index for 04/07: $65.12, off $0.61 (DTN Projected lean index for 04/10: $64.65, off $0.47).

WEDNESDAY'S CASH HOG CALL

Steady to $1 lower. Look for the cash hog trade at midday to open with bids of steady to $1 lower. Conditions remain defensive both in terms of larger country offerings and softening pork demand.