GENERAL COMMENTS
Cash cattle traders just tried to stay out of the heat Tuesday with just a few bids identified under the hot early summer sun. A few bids were noted at $107 live in parts of the South and $177-$178 dressed in parts of the North. A few asking prices were suggested around $114-$115 live and $183 plus dressed. According to the closing report, the national hog base is $0.79 higher ($64-$73, weighted average $71.21). The corn market staged a moderate recovery from Monday's crash, closing 3 cents plus higher thanks to short-covering and reports of dry conditions in Brazil and China. The stock market closed mixed with the Dow off 13 and the Nasdaq up 31.
LIVE CATTLE
Cheered by the prospects of extended cash stability/firmness, live contracts closed 100 to 247 higher with spot June notching its highest settlement since May 11. August has been weaving on both sides of its 40-day moving average for several weeks, managing Tuesday to finish on its north and more friendly side. Beef cut-outs: mixed, up $0.01 (choice: $227.58) to off $0.40 (select: $205.85) with light-to-moderate demand and offerings (67 loads of choice cuts, 43 loads of select cuts, 19 loads of trimmings, 14 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL:
Steady to $2 higher. We should start to see improvement in both buying and selling interest at midweek, though significant trade volume could still be delayed until Thursday or Friday.
FEEDER CATTLE:
Feeder futures closed sharply higher (i.e., up 127 to 200), once again leaving the cash index in the dust. Besides spillover inspiration from live futures, spot August seemed to attract technical buying near its 40-day moving average around 144. 06/04: $139.03, off $0.20.
LEAN HOGS:
Lean futures were pressured early by more specific reports that Mexico would soon impose a 20% tariff on U.S. pork legs and shoulders. July found some support near the bottom of a trading channel held since early May (i.e., near 75), but certainly closed in the bottom third of that channel. Late short-covering lifted most issues well off session lows. Nevertheless, prices settled no better than mixed, up 67 to off 105. On the other hand, August seems to be slipping into a lower price zone. The carcass value jumped significantly higher with stronger demand reported for all primals. Pork cut-out: $78.53, up $1.37. CME cash lean index for 06/01: $71.01, up $1 (DTN Projected lean index for 06/04: $71.73, up $0.65).
WEDNESDAY'S CASH HOG CALL:
Steady to $1 higher. Hog buyers should resume procurement chores at midweek with bids steady to $1 higher.
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