Tuesday Morning Livestock Market Summary

GENERAL COMMENTS:

Cattle buyers and sellers will naturally have ears cuppedMonday morning for reports on the success of meat clearance over the long holiday weekend. Beyond such efforts, feedlot activity will be limited to the distribution of new showlists. Our guess is that the post-holiday offering will be somewhat larger than last week. Initial asking prices could be around $134 plus in the South and $212 plus in the North. Live and feeder futures seem likely to open moderately lower, checked by follow-through selling and further worry linked to the larger-than-expected April placement confirmed by Friday's May 1 Cattle on Feed report.

The cash hog trade seems set to open with bids steady to $1 lower higher. Bullish expectations seem to be building as we move into the last third of the second quarter. Weekly kill levels should be steadily dropping as we move to we move toward midsummer. Last week's kill fell to 2.19 million head, but the cutback was primarily skewed by the holiday and a Saturday kill of no more than 6,000 head. Still, the pre-holiday production decline should help support a higher wholesale trade through the week. At this point, we expected to see a very large Saturday slaughter ahead as packers move to make up for lost time. Lean futures should open moderately higher with the help of residual buying interest, bull spreading and ideas of a shift toward more constructive fundamentals over the next several months.

	BULL SIDE		BEAR SIDE
1)	Look for cattle buyers to start out the short week with longer shopping lists, a function of relatively slow country movement last week on one hand and the need to cover the first full production week of June on the other.	1)	The May 1 Cattle on feed report released on Friday was generally judged to be bearish thanks to confirmation of a much larger than expected April placement.
2)	In the wake of at least average meat clearance over the Memorial Day weekend, retailers and food managers should be fairly aggressive supporters of beef cutouts for at least several days.	2)	According to the DTN placement schedule, big lots now have approximately 6.36 million head of steers and heifers scheduled to finish this summer, 10% more than June-August 2016 and 9% greater than the five-year average.
3)	Summer lean hog futures closed on Friday with another round of new contract highs, suggesting that nearby bulls are eager to anticipating more constructive fundamentals over the next 30 to 60 days.	3)	Uncertainties surrounding the exact timing of new chain speed in the months ahead and the level of herd expansion to be suggest by the June 1 Hogs & Pigs report probably means that deferred lean hog futures are set to lose more and more ground to summer contracts.
4)	During the week ending May 23, noncommercial traders were net buyers of 13,800 lean hog contracts, extending their net long to 44,500 contracts.	4)	The potential appreciation of the pork carcass value through the summer season could be significantly limited by falling beef prices as cattle slaughter levels mount over the next 30 to 60 days.

OTHER MARKET SENSITIVE NEWS

CATTLE: (voanews.com) -- A new ban imposed by India's government on the sale of cows and buffaloes for slaughter to protect animals considered holy by many Hindus is drawing widespread protests from state governments and animal-related industries.

Many state governments criticized the ban as a blow to beef and leather exports that will leave hundreds of thousands jobless and deprive millions of Christians, Muslims and poor Hindus of a cheap source of protein.

The rules, which took effect Friday, require that cattle traders pledge that any cows or buffalos sold are not intended for slaughter.

At least one state government is planning a challenge in court. Some have said the ban infringes on states' commercial autonomy and are calling for a nationwide protest.

Others say the ban will hurt farmers who will be forced to continue feeding aged animals, and that millions of unproductive cattle will be turned out on the streets.

The new rules also propose the setting up of a vast animal monitoring bureaucracy, including animal inspectors and veterinarians, to ensure the rules are followed. Traditionally, cattle fairs and markets allow the sale of animals headed to abattoirs to provide raw materials used in dozens of industries, including leather making, soap and fertilizer.

The state governments have appealed to Prime Minister Narendra Modi to repeal the order, which they say was issued without consultations with them. Modi's Bharatiya Janata Party has been pushing a Hindu nationalist agenda since it came to power in 2014.

Chief Minister Pinarayi Vijayan, the top elected official in southern Kerala state, wrote to Modi on Sunday describing the restrictions as a ``drastic move'' that would have "far-reaching consequences and would be detrimental to democracy."

He said the move amounts to "an intrusion into the rights of the states" in India's federal structure and violates the principles of the Indian Constitution.

The government of West Bengal state also protested the move, saying the Modi government cannot make such decisions unilaterally.

Chief Minister Mamata Banerjee said the state would not accept the imposition of such restrictions on its commercial authority. She described it as a step by the Modi government to ``destroy the federal structure of the country.''

"We won't accept the decision. It is unconstitutional. We will challenge it legally," Banerjee told reporters Monday.

Hindus, who form 80 percent of India's 1.3 billion people, consider cows to be sacred, and for many eating beef is taboo. In many Indian states, the slaughtering of cows and selling of beef is either restricted or banned. India has the highest number of vegetarians in the world as a result of Hinduism's predominance, although not all Hindus are vegetarians.

While the eating of beef is not a crime in many states, slaughtering a cow carries a punishment of up to seven years in jail throughout the country. In Gujarat state, lawmakers have approved a bill increasing the punishment for killing a cow to life imprisonment.

Critics say the new rules, ostensibly to protect the way animals are treated and transported, are in keeping with demands of Hindu nationalists, who have long been pressing for a nationwide ban on the sale of beef. The past two years have also seen a rise in vigilante attacks on Muslims and lower caste Hindus involved in the cattle trade. Several deaths have occurred.

On Monday, police arrested seven people on suspicion of assaulting two Muslim men who were transporting meat in western Maharashtra state. The men were beaten and forced to chant Hindu slogans by a vigilante group on Sunday, police said.

Meanwhile, leather and meat industry groups said the ban could push them out of business.

Fauzan Alavi of the All India Meat and Livestock Exporters Association said beef exports, which had been growing rapidly, have already been affected. "Such a drastic move is bound to hit the industry," Alavi said Sunday.

The government "has handed a death certificate to us," said Ramesh K. Juneja of the Council of Leather Exports.

HOGS:(Bladen Journal) -- Smithfield Foods announced that it is investing more than $45 million to expand its blast cell cold storage capabilities at its processing facility in Tar Heel, N.C.

The investment will create approximately 30 new jobs at the Tar Heel facility as well as new employment positions within Smithfield's logistics partner.

This expansion will increase the facility's capacity by 140 million pounds starting in 2018. This project provides additional capacity to support the company's ongoing growth and aligns with its mission to have best-in-class operations.