Tuesday Closing Livestock Market Summary

GENERAL COMMENTS

Cash cattle markets remain inactive Tuesday afternoon with bids and asking prices still poorly defined and generally hard to pin down in any area. The overall lack of direction comes not only following the turnaround in futures, but also from the overall fundamental weakness that traders are much less willing to overlook. This could keep trade from developing until late in the week, although bids and asking prices are likely to be seen sometime Wednesday. According to the closing report, the national hog base is $0.36 higher compared with the Prior Day settlement ($82-$88.50) weighted average $86.87. The corn futures moved mixed in light activity. July futures were 1/2 cent higher Tuesday. The Dow Jones Index is 9 points higher with the Nasdaq up 16 points.

LIVE CATTLE

Firm gains continue to develop in the live cattle complex following narrow market shifts early in the session ($0.15 to $1.40 higher). Aggressive buyer support has moved into the live cattle futures complex through the last half of the trading session based on the surge in support seen in the feeder cattle complex. This has helped to bring additional underlying support to the market as front-month August contracts closed $1.05 per cwt higher at $114.87 per cwt. The lack of volume seen Tuesday is likely to create some overall concern through the rest of the week, as this may bring about even more market volatility. Beef cut-outs: lower, $2.16 lower (select, $200.51) to down $2.30 (choice, $215.24) with light demand and moderate offerings (54 loads of choice cuts, 47 loads of select cuts, 18 loads of trimmings, 20 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL: Steady to $2 lower. Cash markets early Wednesday are expected to remain quiet with the expectation that the Fed Cattle Exchange Auction will deliver the first cash market information of the week. Overall activity is expected to remain light to moderate, limiting spillover support later in the day. Bids and asking prices are expected to become initially formed in feedlot country through the day Tuesday, although trade may be delayed until late in the week.

FEEDER CATTLE

Feeder cattle futures surged higher during the last half of the trading session with most contracts posting firm triple-digit gains ($0.47 to $2.57 higher). Extremely narrow losses that held the market lower through the first couple hours were quickly swept away by aggressive buyer support that moved into the complex. Nearby feeder cattle futures posted gains between $2 and $2.55 per cwt as traders remain forced on the ability to expand price levels with very little volume and the overall lack of seller pressure. Uncertainty is expected to quickly develop early Wednesday as traders look for additional longer-term interest from the market as well as the ability to bring increased trade activity to the complex before the end of the week. CME cash feeder index: 7/10: $149.16, down $0.82.

LEAN HOGS

Trade through the lean hog futures ended mixed in a wide trading range following sluggish market activity and increased market volatility developing in the cattle complex ($1.02 lower to $0.67 higher). Firm support redeveloped early in the session in July and August contracts based on short-covering as commercial traders stepped back into the lean hog complex following moderate to firm pressure early in the week. Short-covering activity seen in nearby contracts is likely to draw additional buyer support through the rest of the complex later in the week, although concerns of longer-term fundamental pressure may limit buyer interest through the rest of the week. Carcass values continue to gain support based on solid gains in loins and hams. Triple-digit pressure in ribs and bellies curbed the overall support of the market, but the tone of the market continues to move higher. Pork cut-out: $105.26 up $0.33. CME cash lean index for 7/7: $92.46, unchanged. DTN Projected lean index for 7/10 $92.59, up $0.13.

WEDNESDAY'S CASH HOG CALL: Mixed. Narrowly mixed price ranges are expected to redevelop midweek with early market price levels expected to be seen from 50 cents lower to 50 cents higher. The tone of the market is likely to be steady to slightly higher, although market stability is starting to be the focus during early trade over the last couple of days. Wednesday's slaughter expectations are set at 435,000 head with 25,000 likely to be seen Saturday.