Tuesday Closing Livestock Market Summary - 2018 Lean Hog Contracts Close Sharply Lower

GENERAL COMMENTS

The cash cattle trade was a complete nonevent with players not even bothering to field nominal bids and asking prices. According to the closing report, the national hog base is unchanged ($59-$65.16, weighted average $64.78). The corn market closed several cents higher, supported by dry weather in Brazil where the corn crop estimate seems to be shrinking every day. The stock market closed lower on news that President Donald Trump was not satisfied with the progress of China trade talks. The Dow closed 178 points higher with the Nasdaq down by 15.

LIVE CATTLE

Live cattle futures opened moderately lower on an initial round of profit-taking and long liquidation. But contracts started to firm back toward unchanged near midsession, and when everything was said and done by the end of the day, live issues closed mostly 3 to 30 points higher. Spot June was the one exception, closing 2 points lower. Beef cut-outs: significantly lower, off $1.47 (choice: $229.35) to $1.66 (select: $205.86) with light-to-moderate demand and moderate offerings (48 loads of choice cuts, 47 loads of select cuts, 14 loads of trimmings, 20 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL:

Steady to $2 lower. We should start to see a little business interest on both sides of the isle. If traders want to have marketing chores completed by late Thursday, they will need to at least start stirring the pot by midweek.

FEEDER CATTLE:

At the conclusion of a largely listless trading session, feeders settled 2 to 22 higher. If you have enough imagination, a double bottom could be forming in the August feeder chart. But the board would have to conquer multiple levels of overhead resistance before such a case could be made (e.g., besting $146.33 would be key). 05/21: $133.41, off $0.24.

LEAN HOGS:

Lean hog futures closed sharply lower thanks to aggressive long liquidation and commercial-selling. Prices settled 15 to 172 lower with 2018 issues losing ground to 2019 counterparts. July and August closed at the lowest levels since April 3. More dramatically, October and December plunged to new contract lows. Carcass value held about steady with higher fresh cuts and bellies nearly offset by lower hams and picnics. Pork cut-out: $76.14, up $0.04. CME cash lean index for 05/18: $68.38, up $0.64 (DTN Projected lean index for 05/21: $68.69, up $0.31).

WEDNESDAY'S CASH HOG CALL:

Steady. Look for opening cash bids to be near steady will supply and demand factors roughly balanced before the Memorial Day holiday.