GENERAL COMMENTS: Activity in lean hog futures clearly led movements through the entire livestock complex as traders focused on potential increased pork trade based on trade talks redeveloping with China. Feeder cattle futures surged higher following continued pressure in grain trade. Corn futures ended lower Monday in limited trade. September futures is 9 1/4 cents per bushel lower. Dow Jones Index is 117 points higher with Nasdaq up 84 points. Cash cattle activity remains undeveloped with bids and asking prices yet to be seen. This may force earlier-than-normal trade this holiday week. National Daily Direct afternoon hog report is $0.01 lower with a weighted average of $68.15 per cwt. Full range of $60 to $79 per cwt on 9,745 head sold.
LIVE CATTLE: Light buying focused on spillover support from feeder cattle and hog futures ($0.25 lower to $0.70 higher). August futures settled lower after narrow trading ranges developed through the entire complex. This sparked some underlying movement with the remainder of contracts holding light to moderate support. Although significant questions remain about the ability to stabilize cash and beef values during July, the triple-digit gains in feeder cattle and lean hog futures created optimism through the entire complex. Beef cut-outs: higher, $0.08 higher (select, $195.64) and up $0.06 (choice, $219.72) with light demand and light to moderate offerings, 139 loads (61 loads of choice cuts, 47 loads of select cuts, 8 loads of trimmings, 23 loads of coarse grinds).
TUESDAY'S CASH CATTLE CALL: Steady. Limited direction expected Tuesday, although it is thought both sides will attempt to trade cattle Wednesday before the holiday break. This may stimulate bids and asking prices Tuesday.
FEEDER CATTLE: Continued corn pressure sparked renewed support Monday ($0.17 to $1.80 higher). Active gains developed in deferred feeder cattle contracts as traders quickly adjusted to additional strong losses in grain trade. December corn futures fell 9 cents per bushel, following the USDA report that left markets sliding lower over the last two sessions. There still remain unanswered questions about overall acreage planted to corn for the year. But for now, feeder cattle traders are focusing on lower production costs. CME cash feeder index for 6/28 is $133.44, up 0.32.
LEAN HOGS: Most contracts posted strong, triple-digit gains as traders become optimistic about potential pork business to China through the rest of the year ($0.47 to $2.87 higher). Even though nearby lean hog futures were unable to close limit higher Monday, aggressive price support flooded into the market following an announcement that a trade "cease-fire" had been agreed upon by both sides. This will help to stimulate additional talks over the next several weeks or months, but it is still uncertain if this will be enough to bring both sides together and actually make a long-term agreement. August futures rallied $2.70 higher, moving above $78 per cwt and sparking some additional bullish momentum based on breaking away from long-term lows. Pork values shifted lower as sharp gains in rib cuts were offset by aggressive belly losses. Pork cutout values fell $0.56 per cwt, moving to $73.28 per cwt on 355 loads. CME cash lean index for 6/27 is $76.05, down 1.21. DTN Projected lean index for 6/28 is $74.97, down 1.08.
TUESDAY'S CASH HOG CALL: Steady to $2 lower. Follow-through cash hog market pressure is expected Tuesday with most bids $1 per cwt lower and packers expected to find ample hogs for near-term needs. This may spark some underlying pressure going into the holiday weekend. Tuesday processing schedules are expected to hit 477,000 head. Friday slaughter numbers are expected at 441,000 head after the holiday. Saturday runs are expected near 181,000 head.
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