Monday Closing Livestock Market Update

GENERAL COMMENTS

Activity in feedlot country was typically limited to the distribution of new showlists. The late month offering is generally larger with only Texas showing fewer ready steers and heifers. According to the closing report, the national hog base is $0.93 lower ($77.00-83.50, weighted average $82.39). The corn market closed several cents lower, checked by weather maps promising milder temps and chances for rain over much of the main growing area. The stock market settled on a mixed basis with the Dow off 66 points and the Nasdaq better by 23.

LIVE CATTLE

Bears took a deep cut out of live futures on the opening and never really let the pressure up through the entire season. The initial shockwave probably came from June's huge placement confirmed on Friday. But further long liquidation fed on fears regard building late summer beef (as well as total meat) tonnage. Spot August closed a little below its 100-day averaged, and Oct and Dec fell below 40-day moving averages.

Beef cutouts: significantly higher, up $0.55 (choice, $207.46) to $3.09 (select, $197.89) with fairly good demand and moderate offerings (52 loads of choice cuts, 24 loads of select cuts, 10 loads of trimmings, 13 loads of ground beef).

TUESDAY'S CASH CATTLE CALL: Steady to $2 lower. Tuesday is expected to be another slow-go with bids and asking prices poorly defined.

FEEDER CATTLE

Feeders also gapped lower on the opening, hammered by the imagined combination of larger replacement supplies ahead and narrowing feedlot margins. August through November settled below 40-day moving averages. On an estimated run of 3,948 head (down from 5,428 last week and 5,059 in 2016), Oklahoma City sold feeder steers and heifers generally $4-7 lower. CME cash feeder index: 07/21: 151.88, up 2.85.

LEAN HOGS

Lean contracts settled 20 to 80 points lower, checked by long liquidation, nervousness regarding shifting fundamentals, and spillover selling from the cattle complex. Unless the cash market suddenly goes into a nasty tailspin, spot August should find support near last week's low around $79.62. The carcass value closed moderately lower tied to softer demand for loins, ribs, picnics, and hams. Pork cut-out: $104.02, off $0.67. CME cash lean index for 07/20: 91.67, off .33 (DTN Projected lean index for 07/21: 91.13, off .54).

TUESDAY'S CASH HOG CALL: $0.50-$1 lower. Expect hog buyers to remain on the defensive in the morning.