Tuesday Closing Livestock Market Summary - Cattle Futures Close Higher, But Well Off Session Highs

GENERAL COMMENTS

The feedlot trade remained at a standstill Tuesday with just a few bids of $126 noted in parts of the South. Our guess is cattle sellers will start out pricing showlists around $130 or better on a live basis. According to the closing report, the national hog base is .33 lower ($56.50-63.75, weighted average $62.52). Old-crop corn closed 2 cents higher, supported by further reports of dry conditions in Argentina. The stock market closed lower thanks in part to the fear of rising interest rates. The Dow settled 299 points lower while the Nasdaq lost 91.

LIVE CATTLE

This was one session that bulls would have preferred to ring the closing bell. While live contracts settled 10 to 62 points higher, April, June, and August slipped more than 100 points below session highs. On the other hand, April through August continue to respect general trendlines as defined by 40-day and 100-daying moving averages. Spot Feb is scheduled to expire at noon Wednesday. Beef cut-outs: higher, up .07 (select: $214.79) to $1.00 (choice: $220.52) with light to moderate demand and moderate offerings (66 loads of choice cuts, 31 loads of select cuts, five loads of trimmings, 16 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL:

Steady to $2 higher. Bids and asking prices could become better defined at midweek, but significant trade volume may not surface until Thursday or Friday.

FEEDER CATTLE:

Although most contracts managed to save triple-digit gains Tuesday (i.e., up 95 to 130), they continue to struggle for support in the wake of last Wednesday's crash. The stability of August probably looks the best in that regard, finding decent support where 40-day and 100-day moving averages converge (i.e., near 150.30). CME cash feeder index: 02/26: 147.76, off .54.

LEAN HOGS:

Lean futures closed mixed, up 40 to off 27. Spot April closed flat, trapped by both the discount of the cash index and rather towering overhead resistance at both the 40-day and 100-day moving averages. While the technical profiles of summer issues are nothing to take to the state fair, they continue to find at least token support near longer-term support lines (e.g., August settled Tuesday above its 40-day moving average. Pork cut-out: $79.53, off .74. CME cash lean index for 02/23: 69.32, off .46 (DTN Projected lean index for 02/26: 68.83, off .49).

WEDNESDAY'S CASH HOG CALL:

Steady to $1 lower. Opening hog bids in the morning are likely to be some weaker thanks to Tuesday's large country run and softening carcass value.