Monday Closing Livestock Market Summary - Cattle Markets Weaken on Strong Supply

GENERAL COMMENTS:

Cash cattle trade was undeveloped Monday, with activity limited to inventory taking and showlist distribution that usually takes place early in the week. Active bids and asking prices are not expected until midweek or later. According to the closing report, the national hog base is $1.03 higher compared with the prior day settlement ($53.00-$63.50) weighted average $60.53. Corn futures are higher in light volume. September futures were 3 cents higher Monday. Dow Jones Index is 149 points lower with Nasdaq up 4 points.

LIVE CATTLE

Moderate losses posted through live cattle futures, although traders were unwilling to hold early session lows as market stability seems to be the focus in the near future ($0.42 to $1.45 lower). December live cattle futures led the complex lower Monday with a $1.45 per cwt loss. Lack of support in the entire cattle complex comes as traders look for increased overall movement following the digestion of increased cattle available in feedlots. It is not expected that this bounce higher in numbers will totally derail the support seen over the last few weeks, but this could cool overall buyer support when it comes to long-term market moves. Beef cut-outs: higher, $0.68 higher (select, $195.39) and up $1.36 (choice, $206.16) with light demand and offerings (46 loads of choice cuts, 16 loads of select cuts, 9 load of trimmings, 17 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL:

Steady. Cash cattle markets expected to remain undeveloped until well into the week. There is growing uncertainty about just how much additional support will be seen following firm futures pressure.

FEEDER CATTLE:

Firm pressure swept through the complex, focusing on increased placement levels in August ($0.50 to $1.87 lower). Despite the sluggish movements in front-month September, which posted a loss of 50 cents per cwt, the remainder of nearby contracts posted triple-digit losses. There is growing uncertainty as to just how much follow-through pressure will develop, as market losses continue to develop. Moderate to firm pressure in live cattle futures continues to be closely watched by feeder cattle traders as they start looking past supply levels and to long-term demand potential in the complex. CME cash feeder index for 9/21 is $157.30 up $1.01.

LEAN HOGS:

Limited trade through most of the complex with traders pushing prices mostly higher ($0.42 lower to $0.70 higher). October lean hog futures led the complex higher, moving to $61 per cwt at closing bell. The limited price ranges through most of the day left most traders hovering on the sidelines. Although there continues to be a sense of firmness to the lean hog complex, the ability for traders to push prices through short-term resistance levels remains unknown. This may limit additional activity early in the week. Pork cuts have gained additional momentum Monday with increased overall support developing through the complex. Pork cutout values gained $0.86 per cwt, moving to $78.70 per cwt. CME cash lean index for 9/20 $59.09 up $1.65. DTN Projected lean index for 9/21 $60.85 up $1.76.

TUESDAY'S CASH HOG CALL:

Steady to $2 higher. Firm follow-through cash market support is expected to continue to develop

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