GENERAL COMMENTS:
Cash cattle activity remained sluggish Tuesday afternoon with bids and asking prices undeveloped. It is likely cash trade will not become active until midweek or later. Even though cash trade remained sluggish last week, formulated sales increased. Generally, showlists seen Monday are mixed to mostly larger than the previous week. According to the closing report, the national hog base is $2.26 higher compared with the prior day settlement ($44.00 to $56.50) weighted average $52.92. Corn futures are lower in light activity. September futures were 4 3/4 cents lower Tuesday. Dow Jones Index is 215 points higher with Nasdaq up 69 points.
LIVE CATTLE
Light pressure trickled through live cattle futures with limited interest developing through the entire Tuesday session ($0.12 to $0.45 lower). Most trade interest through the livestock complex was diverted to the lean hog complex, which posted strong market support through the entire session. Volume in live cattle trade remained extremely limited, allowing very little activity in nearby October and December contracts. The most-active live cattle futures were spring and summer 2019 contracts as traders tried to adjust to late-day losses in feeder cattle futures just before closing bell. This left February through August futures slightly unsupported with losses of 35 to 45 cents per cwt at the end of the session. The overall tone of the market remains firm following gains seen last week, but at this point it appears most traders are comfortable with current positions and unwilling to actively step back into the market and push the market in either direction. Beef cut-outs: lower, $1.91 higher (select, $195.47) and down $0.75 (choice, $205.29) with moderate demand and offerings (86 loads of choice cuts, 56 loads of select cuts, 12 load of trimmings, 18 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL:
Steady. Very limited interest is expected at midweek, although packers are expected to show some slight interest with opening bids likely to develop. Active trade is likely to not be seen until late in the week once again.
FEEDER CATTLE:
Late-day selling eroded previous support ($0.07 to $1.50 lower). Feeder cattle futures traded within a narrowly mixed range through most of the session, but late-day pressure quickly developed in nearby contracts as all remaining 2018 contracts posted triple-digit losses. The overall lack of support in the complex comes more from limited volume than any fundamental or technical shift seen in either the cattle market or outside market factors. Continued pressure in grain markets seemed to gain very little attention even though corn prices fell an additional 4 cents per bushel, which ultimately impacts overall production costs of cattle in feed yards. CME cash feeder index for 9/17 is $153.62 up $0.24.
LEAN HOGS:
Aggressive market support quickly flooded nearby contracts, posting triple-digit gains in October through February futures ($0.60 to $2.72 higher). The aggressive market surge was contained to nearby contracts Tuesday as October futures led the market higher through the entire session. Even though spot-month contracts flirted with limit gains through most of the session, prices closed slightly below that level with a $2.72 per cwt gain as prices closed at $59.17 per cwt in front-month futures. Follow-through support developed in most pork cutout values with picnic cuts the only primal to shift lower Tuesday. Pork cutout values gained $1.55 per cwt, moving to $77.57 per cwt. CME cash lean index for 9/14 $53.48 up $1.63. DTN Projected lean index for 9/17 $54.58 up $1.10.
WEDNESDAY'S CASH HOG CALL:
Steady to $2 higher. Moderate follow-through buyer support is expected to be seen early Wednesday morning in cash hog bids even though the full range is expected to be seen steady to $2 per cwt higher, most bids are expected $1 per cwt higher. Wednesday runs are currently estimated at 420,000 head. Saturday schedules are estimated at 187,000 head.
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