Monday Closing Livestock Market Summary - Lean Hog Futures Clobbered With Double Whammy

GENERAL COMMENTS

It was a typically slow Monday in feedlot country with showlist distribution the only marketing chore on the schedule. Ready numbers appear to be generally smaller than last week. According to the closing report, the national hog base is $1.02 lower ($45-$48.50, weighted average $47.34). Old-crop corn contracts settled fractionally lower thanks to late-session profit-taking. As the trade war between China and the U.S. heats up, the stock market closed substantially lower. The Dow closed 458 points lower with the Nasdaq off by 193.

LIVE CATTLE

The live market tried to stabilize in the early going. But between cash worries, technically bearish charts and spillover bearishness from lean hog futures, an early week recovery really didn't have a chance. When the selling bias resumed after midsession, bears particularly focused on spot April and June, which lost 135 and 162 points, respectively. Beef cut-outs: widely mixed, up $1.81 (select: $210.50) to off $1.24 (choice: $219.80) with light-to-moderate demand and moderate offerings (55 loads of choice cuts, 13 loads of select cuts, 7 loads of trimmings, 11 loads of ground beef).

TUESDAY'S CASH CATTLE CALL:

Steady to $2 lower. Basis opportunities could get cash business off to an early start. Otherwise, significant trade volume should be delayed until Wednesday or Thursday.

FEEDER CATTLE:

Following the early pattern of their live counterparts, feeders tried to stop the bleeding for a minute or so. But it wasn't long before aggressive long liquidation and technical-selling resumed. Contracts settled mostly 65 to 165 lower. The August issue set a new contract low. On an estimated run of 1,912 head (down from 4,243 last week and 6,334 the year before), Oklahoma City was not tested well enough to generate an accurate market test. Yet a lower undertone seemed to be evident. CME cash feeder index: 03/30: $135.06, off $0.66.

LEAN HOGS:

Recent headlines definitely spelled trouble for would-be bulls. First, there was last Thursday's confirmation of the industry's aggressive pace of expansion, and then there was China's first-of-the-month decision to impose a 25% tariff on U.S. pork. All 2018 contracts closed with triple-digit losses, off 112 to 300. Carcass value closed moderately higher with all primals appreciating except the loin and picnic. Pork cut-out: $70.20, up $0.48. CME cash lean index for 03/29: $58.04, off $1.02 (DTN Projected lean index for 03/30: $56.72, off $1.32).

TUESDAY'S CASH HOG CALL:

Steady to $1 lower. With Saturday kill plans not really suggesting a need to make up for Monday's slow start, buyers should continue to lean into early spring country supplies.