Tuesday Closing Livestock Market Summary - Livestock Markets Still Weighted By Bearish Trade Mood

GENERAL COMMENTS: A light trade has been reported in parts of the South around the noon hour at $120, about $2 to $3 lower than last week's weighted averages. Asking prices are not yet fully established in the North, although a few deals have been reported in parts of Iowa at $195, about $5 lower than last week's weighted average, and a regional player in Nebraska has paid $196 on a limited number of cattle. According to the closing report, the national hog base is unchanged ($72.00-$81.50, weighted average $79.34). Corn futures settled 2 cents higher. The stock market closed lower, off 48 points in the SP 500.

LIVE CATTLE: While prices have been dropping $10 per cwt over the past two weeks, total open interest in live cattle futures has simultaneously dropped 13%, so futures traders may feel that enough selling has already occurred. The August contract stabilized above $109 per cwt. Beef cut-outs were sharply lower amid a glut of supply, off $2.15 (select, $211.83) to $3.13 (choice, $223.87) with light-to-moderate demand and moderate-to-heavy offerings (168 total load count of cuts, trimmings, and grinds).

WEDNESDAY'S CASH CATTLE CALL: Lower by $2 or $3. Packers may have sensed bearish panic in the overall market and chosen to strike while the iron is hot, establishing a lower price level ($120 South/$195 North) early in the week.

FEEDER CATTLE: Feeder cattle futures posted Tuesday's most notable recovery, with the nearby contracts at one point $4.200 better than Monday's contract lows. At the close, contracts ranged from $0.650 higher to $1.275 higher. CME cash feeder index for 05/06: $136.37, off $0.74.

LEAN HOGS: After another wild morning of exploring just how bearish the implications of an escalated trade war with China could be to summer export demand, lean hog futures ultimately closed mixed Tuesday afternoon. June and July settled lower ($0.500 and $0.550, respectively) but everything further out posted a slight recovery. The August contract, for instance, remains $8.450 off its April high but $12.050 above where it started the year, before the African swine fever fears ramped up demand projections. Carcass value closed notably higher, especially supported by a recovery in rib (up $6.90) and belly (up $5.48) primals, which wholesalers must still expect to do well in coming months regardless of trade uncertainties. Pork cut-out: $85.67, up $2.78.CME cash lean index for 05/03: $82.82, down $0.20 (DTN Projected lean index for 05/06: $82.63, down $0.19).

WEDNESDAY'S CASH HOG CALL: Steady. Hog buyers are working in an extremely uncertain environment, but have had time to factor in the week's trade developments.

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