Monday Closing Livestock Market Summary - Cattle Futures Continue in Freefall

GENERAL COMMENTS

Early week cash activity was typically quiet with efforts on both sides limited to the distribution of showlists. The new offering appears to be mixed, larger in the South and smaller in the North. Overall, ready numbers appear to be somewhat larger. According to the closing report, the national hog base is $1.48 lower ($48-52.50, weighted average $51.56). The corn market closed generally 3 cents lower, disappointed by weekly export inspections. The stock market recovered Monday, supported by easing trade-war talk. The Dow closed 669 points higher with the Nasdaq better by 227.

LIVE CATTLE

Live traders just can't find the brakes here, essentially ignoring the premium status (albeit eroding) of cash feedlot sales. Prices slumped 45 to 127 points lower with issues covering the second half of the year getting hit the hardest. Selling action was linked to long liquidation, technical-selling and the bearish implications of February's larger-than-expected placement total. Beef cut-outs: lower $0.56 (choice: $222.53) to $0.94 (select: $215.46) with light-to-moderate demand and moderate offerings (45 loads of choice cuts, 27 loads of select cuts, 10 loads of trimmings, 12 loads of ground beef).

TUESDAY'S CASH CATTLE CALL:

Steady to $2 lower: Barring the surfacing of attractive basis opportunities, cash activity on Tuesday will remain quiet with significant trade volume probably delayed until Wednesday or later.

FEEDER CATTLE:

Feeders bled right along with the bloody mess in the live market, closing 77 to 175 lower. Troubled by falling cash bids and narrowing margins, feedlot managers are getting tough on new replacement costs. On an estimated run of 4,600 head (down from 6,065 last week and 6,104 in 2017), Oklahoma City sold feeder steers $3-$6 lower. A light test of their heifer mates looked mostly $3 lower. Steer calves were marked $1-$3 lower (heifers not well tested). CME cash feeder index: 03/23: $136.68, off $1.30.

LEAN HOGS:

Initially relieved by signs of most promising negotiations between U.S. and Chinese trade officials over the weekend, lean contracts bounced substantially higher through midsession. But then short-covering ran out of energy as cash news continued to sour. At the end of the session, most lean contracts settled no better than 5 to 40 lower. Spot April closed off 40, apparently still comfortable in leading the cash index lower. Carcass value closed modestly higher as stronger bellies, ribs and butts offset weakness in loins and picnics. Pork cut-out: $77.23, off $0.02. CME cash lean index for 03/22: $62.32, off $0.71 (DTN Projected lean index for 03/23: $61.35, off $0.97).

TUESDAY'S CASH HOG CALL:

$1-$2 lower. Look for buyers to stay on the defensive Tuesday as long as the country offering remains plentiful.