Monday Closing Livestock Market Summary - Aggressive Long Liquidation Digs Deeper Cattle Discounts

GENERAL COMMENTS

Cash cattle traders experienced a typically quiet Monday with the distribution of new showlists the only real item on the agenda. The fed offering for the first full week of June is larger than last week with only Colorado showing a few less ready steers and heifers. Note that Mandatory did report several strings in Nebraska ($190) and Texas ($120), no doubt tied to the strong basis. According to the closing report, the national hog base is $0.05 higher ($49-$60, weighted average $58.79). Corn futures slumped a nickel plus lower, pressured by profit-taking in the wake of last week's rally and some chance for better rainfall in Brazil. The stock market closed higher with the Dow up 94 points and the Nasdaq better by 55.

LIVE CATTLE

Unnerved by last week's big jump in weekly slaughter (i.e., 647,000 head, up 24,000 from the prior week), live cattle futures closed sharply lower. Spooked by building second-quarter beef supplies, long liquidation and technical-selling, live prices crashed by 87 to 135 points. Beef cut-outs: significantly higher, up $0.84 (choice: $229.14) to $1.71 (select: $211.20) with moderate-to-good demand and moderate-to-heavy offerings (38 loads of choice cuts, 41 loads of select cuts, 5 loads of trimmings, 12 loads of ground beef).

TUESDAY'S CASH CATTLE CALL:

Steady. Look for another quiet cash session on Tuesday with both sides waiting for the greater of cash potential or vulnerability.

FEEDER CATTLE:

Feeder issues closed sharply lower, mostly off 170 to 277. The determined selling was primarily linked to the faltering of deferred live futures. On an estimated run of 8,500 head (down from 11,146 last week and 12,473 in 2017), Oklahoma City sold feeder steers and heifers steady to $2 lower. 05/04: $138.10, up $0.20.

LEAN HOGS:

While lightly traded spot May closed 100 points lower, most lean contracts scored moderate progress (i.e., up 27 to 65). Summer months may have been helped Monday by last week's decline in weekly slaughter and suggestions that the seasonal slide in chain speed has finally begun. Carcass value erupted sharply higher, powered by much-improved demand for all cuts except butts (especially bellies and hams). Pork cut-out: $71.55, up $2.26. CME cash lean index for 05/03: $63.13, up $0.20 (DTN Projected lean index for 05/04: $63.29, up $0.16).

TUESDAY'S CASH HOG CALL:

Steady to $1 higher. Cash bids in the morning should have a firm undertone thanks to Monday's surge in carcass value and slowly tightening market hog numbers.