GENERAL COMMENTS: Lean hogs were under pressure most of Monday's session with most nearby contracts settling $2 to $2.55 per cwt lower. Cattle trade lacked direction with futures closing mixed. Cash cattle activity was at a standstill Monday afternoon with bids and asking prices unavailable. It is likely that trade will be delayed until the second half of the week, but a few token bids may start to move into the market Tuesday. The National Daily Direct afternoon hog report was $0.51 higher ($57-$68, weighted average $66.27) on 10,620 head sold. Corn futures inched higher in limited trade with September up 3/4 cent. Dow Jones Index was 115 points lower with the NASDAQ down 63 points.
LIVE CATTLE: Live cattle futures closed mixed, $0.85 lower to $0.27 higher. Following choppy trade throughout the morning, pressure developed in nearby contracts, leading to moderate-to-firm losses in August and October contracts. August led the complex lower with an 85-cent loss. Traders in nearby contracts attempted to cover positions seen last week. A light-to-moderate market correction is likely in the near future. Prices remain near short-term resistance levels. Some commercial support could be seen through the rest of July, helping to expand market gains. Beef cut-outs: lower, down $0.39 (select, $194.41) to down $0.21 (choice, $217.46) with moderate demand and offerings, 126 loads (55 loads of choice cuts, 38 loads of select cuts, 14 loads of trimmings, 19 loads of coarse grinds).
TUESDAY'S CASH CATTLE CALL: Steady. Packer interest is expected to remain sluggish Tuesday morning. Although a few token bids may start to develop through the day, most active interest is likely to be delayed until midweek or later.
FEEDER CATTLE: Feeder cattle futures settled $0.12 lower to $0.07 higher. Following the wide market swings late last week, feeder cattle futures struggled to find direction Monday, shifting higher and lower in a limited range. Concerns about rising corn prices leading to higher production costs are still keeping most traders cautious. Traders are now focusing on longer-term demand and firming technical support as nearby and deferred contracts pull away from their lows. This may spark renewed commercial interest through the rest of the summer. CME cash feeder index for 7/5 is $134.37, up $1.16.
LEAN HOGS: Lean hog futures closed sharply lower Monday (down $0.917 to $2.55). Pressure developed in all contracts with most nearby contracts falling $2 per cwt or greater Monday afternoon. The abrupt shift lower was sparked by renewed pressure late last week. But the lack of volume on Friday seemed to have little impact on market direction, as pressure swept through the complex as trade volume improved Monday. Contracts are testing long-term support levels seen last week. Continued pressure over the next trade sessions is expected to add liquidation pressure with most nearby contracts moving to four-month lows. Although there continues to be hope for increasing pork demand in Asia, current trade relationships are providing little evidence exports will pick up anytime soon. Pork values posted strong losses with aggressive losses in picnic and rib cuts. Pork cutout values fell $1.29 per cwt, moving to $71.88 per cwt on 266 loads. CME cash lean index for 7/3 is $72.83, down $0.39. DTN Projected lean index for 7/5 is $71.92, down $0.91.
TUESDAY'S CASH HOG CALL: Steady to $2 lower. Sharp losses in futures trade, combined with general cash market pressure early in the week, is expected to add to the weaker market tone Tuesday. Most bids are expected steady to $1 per cwt lower, although the underlying tone of the market remains generally weak. Tuesday slaughter numbers are expected at 477,000 head.
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