Monday Closing Livestock Market Update

GENERAL COMMENTS

Cash cattle trade remains undeveloped following generally mixed showlists that were distributed through the morning. Asking prices are still hard to define, but additional clarity will be trought to the market through the upcoming days. Most active trade is expected to be delayed until Wednesday or later, and could be pushed off until after the Cattle on Feed report Friday. According to the closing report, the national hog base is $1.51 lower compared with the Prior Day settlement ($68.00-$74.00) weighted average $71.85. Corn futures moved lower in light activity. September futures were 3 cents lower Tuesday. The Dow Jones Index is 29 points higher with the Nasdaq down 3 points.

LIVE CATTLE

Mixed trade developed in live cattle futures (0.45 lower to 0.20 higher) in moderate trade ranges. The inability of traders to hold onto early support centered around growing pressure in feeder cattle trade. Uncertainty in beef values on the morning cutout report also added to the market concern. Traders are looking for additional market direction from the Cattle on Feed report at the end of the week, as well as the ability to draw support from any sense of market stability coming from cash cattle trade. Beef cut-outs: lower, $0.88 lower (select, $191.62) to down $1.20 (choice, $193.09) with light moderate demand and heavy offerings (54 loads of choice cuts, 18 loads of select cuts, 20 loads of trimmings, 11 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL:

Steady to $2 lower. Bids and asking prices remain generally undeveloped at this point, with active trade not expected until later in the week. This is likely to draw the focus on movements in futures and wholesale beef values. The overall lack of interest may cause traders to remain cautious as they focus on potential long-term supplies.

FEEDER CATTLE

Nearby contracts posted moderate losses Monday following wide and variable trade that focused on the expected supply growth through the end of the week ($0.87 lower to $0.55 higher). With the August 1 Cattle on Feed report released this coming Friday, traders remain concerned about longer-term supply growth and how this will impact not only short-term activity but trade through the rest of the year. CME cash feeder index: 8/18: $143.40, down $0.40.

LEAN HOGS

Strong triple-digit losses flooded back into the lean hog complex Monday morning as traders focused on a combination of fundamental and technical pressure ($0.10 to $1.47 lower). All contracts through April 2018 posted triple-digit losses with traders uncertain about renewed buyer support. October futures posted a $1.45 per cwt loss, settling at $64.67 per cwt. Traders tested short-term support through most of the session, but closed above the early August low of $64.40 per barrel. Lean hog futures are not out of the woods yet, as further pressure later in the week could break through this support level and spark renewed liquidation. Carcass values moved higher with gains in all primals except hams. Pork cut-out: $90.56 up $0.42. CME cash lean index for 8/17: $83.19, down 0.51. DTN Projected lean index for 8/18 $82.35, down $0.84.

TUESDAY'S CASH HOG CALL:

Steady to $2 lower. The expectation is that additional strong pressure will develop early in the day Tuesday following the lack of overall support through the complex. Most bids are likely to be steady to $1 per cwt lower, with the focus on current and future supplies. Tuesday's slaughter expectations are set at 435,000 head with uncertainty about total Saturday numbers still seen, although totals are likely to be near 131,000 head.