Tuesday Closing Livestock Market Summary - Hog Futures Continue to Slide Lower

GENERAL COMMENTS

Cash cattle trading was a non-event Tuesday with both bids and asking prices poorly defined (a few showlists in the South were priced around $125). According to the closing report, the national hog base is .23 higher ($53.50-to-$59.00, weighted average $57.96). Corn futures climbed several cents higher, supported in part by rebounding wheat prices. The stock market took it on the chin again Tuesday as investors continue to stew over the prospects for higher interest rates. The Dow closed as much as 424 points lower with the Nasdaq off 121.

LIVE CATTLE

This market opened higher thanks to follow-through buying interest from Monday, but prices seemed to steadily weaken from midmorning through the close. When the dust settled, most months ended moderately lower, off 17 to 80. June was the only issue to finish some higher (i.e., up 17), probably benefiting some from bull spreaders taking profits. Although contracts settled much closer to session lows than session highs, the sell-off did not appear to be technically significant. Beef cut-outs: sharply higher, up $.39 (select: $202.11) to $2.54 (choice: $217.65) with good demand and moderate to heavy offerings (75 loads of choice cuts, 44 loads of select cuts, six loads of trimmings, 21 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL:

Steady to $2 higher. While some bids and asking prices could become better defined at midweek, we don't expect to see significant trade volume until Thursday or Friday.

FEEDER CATTLE:

Marginally supported by the strengthening cash index and approaching expiration (i.e., Thursday, the 26th), spot April closed 7 points higher. Yet the rest of the market pretty much settled moderately lower, off 37 to 52, thanks to long liquidation and profit taking. (DTN Projected lean index for 04/23: $138.08, off $.05).

LEAN HOGS:

Spooked by large supplies and the possibility of inadequate demand, lean futures slumped lower for the third consecutive session, closing 47-to-155 in the red. The monthly cold storage report released Monday documented significantly more frozen pork as March 31 than a year earlier. July and August have been trapped between 40-day and 100-day averages all months, but fell bellow 40-day averages Tuesday, a stumble that could prompt further technical selling Wednesday. Carcass value pushed a bit higher Tuesday thanks primarily to better demand for fresh cuts. Pork cut-out: $68.08, up $.21. CME cash lean index for 04/20: $57.88, up $1.08 (DTN Projected lean index for 04/23: $59.00, up $1.12).

WEDNESDAY'S CASH HOG CALL:

Steady to $1 higher. Look for steady/firm bids in the morning. Early week receipts have been pretty slow and buyers may need to sweeten the pot in order to fund near-term slaughter plans.