GENERAL COMMENTS
The cash cattle trade was limited in sequence and scope to the distribution of new showlists. Ready numbers were mixed, larger in Kansas and Colorado, smaller in Texas, and near even in Nebraska. Overall, the new offerings look about steady with last week. According to the closing report, the national hog base is $0.86 higher ($56-$64.50, weighted average $62.76). The corn market settled fractionally lower as forecasts for friendly growing conditions offset any spillover enthusiasm from sharply higher bean prices. The stock market closed higher with the Dow up 68 points and the Nasdaq better by 8.
LIVE CATTLE
Live futures collapsed Monday with all contracts closing just above the extreme lows of early April. Spot June actually settled down the 300-point limit, while the balance of the complex lost 125 to 252. Clearly, traders continue to struggle with the threat of building beef supplies in the months ahead and the dubious ability of domestic and foreign demand to handle the burdensome tonnage. Beef cut-outs: solidly higher, up $0.43 (select: $209.12) to $1.15 (choice: $232.12) with fairly good demand and moderate-to-heavy offerings (48 loads of choice cuts, 37 loads of select cuts, 14 loads of trimmings, 8 loads of ground beef).
TUESDAY'S CASH CATTLE CALL:
Steady to $2 lower. With feedlot managers pointing at higher cut-outs and packers groaning over lower futures, not much in terms of significant trade volume is expected to surface Tuesday.
FEEDER CATTLE:
Feeder futures cratered even more than their live counterparts, losing 105 to 352 when all the dust settled. August stumbled to its lowest close since April 4. On an estimated run of 10,000 head (up from 8,525 last week and 8,599 in 2017), Oklahoma City sold feeder steers $1-$4 lower. Heifer mates were tagged $3-$6 lower. Calves were not well tested, but a softer undertone was evident. 05/11: $136.12, off $1.09.
LEAN HOGS:
As spot May faded into the sunset of expiration (i.e., closing at $65.25, off $0.05), June took the bullish bit in mouth and took off at a gallop. Led by the new spot contract, lean issues settled 20 to 175 higher with all summer contracts landing triple-digit gains. June through August settled back above 40-day moving averages. The steady improvement in seasonal fundamentals was the driving force supporting price strength throughout the session. Carcass value closed modestly higher as stronger ribs and bellies overshadowed loin and picnic weakness. Pork cut-out: $73.55, up $0.08. CME cash lean index for 05/10: $64.06, up $0.33 (DTN Projected lean index for 05/11: $64.65, up $0.59).
TUESDAY'S CASH HOG CALL:
Steady to $1 higher. Look for Tuesday's cash trade to open firm to $1 higher, supported by both tightening supplies and strengthening demand.
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