Tuesday Closing Livestock Market Summary - Summer Lean Hog Issues Come Alive With Triple-Digit Gains

GENERAL COMMENTS

Feedlot country was very quiet through the day with neither bids nor asking prices well defined. According to the closing report, the national hog base is $0.96 higher ($53-$61.50, weighted average $59.93). The corn trade rebounded Tuesday by 2-3 cents, supported by further dryness in Brazil as well as wet and cool forecasts for certain Northern states (e.g., Minnesota, North Dakota) that are still way behind normal planting progress. The stock market closed slightly higher with the Dow up 2 points and the Nasdaq better by 1.

LIVE CATTLE

It's not how you start, it's how you finish. Spot June seemed to demonstrate that lesson in spades Tuesday, closing 170 points above the early session stumble. The aggressive reversal didn't change the defensive formation of charts very much, but it did suggest that more specs and commercials are struggling with the old, knotty question: "How cheap in too cheap?" Overall, live futures closed on a mixed basis with nearbys gain on deferreds (i.e., up 112 to off 32). Beef cut-outs: widely mixed, up $1.79 (choice: $230.93) to off $1.27 (select: $209.93) with light-to-moderate demand and offerings (54 loads of choice cuts, 51 loads of select cuts, 12 loads of trimmings, 13ß loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL:

Steady. Trading interest could start to improve at midweek, though further gains in nearby live futures might lend feedlot country more confidence and patience.

FEEDER CATTLE:

It was a pretty wild dance here as well with contracts aggressively recovering from early session lows. When the dust settled, closing prices were mixed on the day, up 10 to off 77. August was quite successful in attracting new buying interest around the low of April 20. 05/07: $137.91, off $0.19.

LEAN HOGS:

For the most part, lean issues settled 42 to 210 higher. Inspired in part by signs of tightening market hog supplies and improving product demand, summer contracts surged over 40-day moving highs for the first time since April 20. Bull-spreaders also played a big role pushing Jun-Aug back into the upper 70s. Carcass value closed some lower with higher ribs, butts, and bellies overshadowed lower hams, picnics and loins. Pork cut-out: $71.30, off $0.25. CME cash lean index for 05/04: $63.29, up $0.16 (DTN Projected lean index for 05/07: $63.33, up $0.04).

WEDNESDAY'S CASH HOG CALL:

Steady to $1 higher. Cash bids at midweek seem likely to open on a firm basis as the country offering slowly tightens.