Tuesday Closing Livestock Market Summary - Losses Continue in Hog Trade

GENERAL COMMENTS:

Active pressure in lean hog futures set a weaker tone for live cattle and lean hog trade Tuesday. The underlying pressure is creating additional concern of late month pressure in livestock trade. Corn futures moved lower in light trade. September futures is 5 1/2 cents per bushel lower. Dow Jones Index is 23 points lower with Nasdaq down 19 points.

CASH MARKETS: Cash cattle markets are quiet following limited bids and asking prices in the North. There are reports of a few cattle selling in the North at $183 to $185 per cwt dressed, but this is not enough to establish a trend. Additional interest may develop Wednesday, but active trade may not be seen until Thursday of Friday. National Daily Direct afternoon hog report is $0.64 higher with a weighted average of $82.54 per cwt. Full range of $71 to $87 per cwt on 8,550 head sold.

LIVE CATTLE: Moderate weakness filtered into live cattle trade as traders focused on pressure through most commodity markets ($0.17 to $0.55 lower). The tone of the market remains firm as traders hold prices near short-term highs. These recent market shifts could establish a moderate sideways trading range between $107 and $110 per cwt over the near future.Beef cut-outs: higher, $1.37 higher (select, $191.13) and up $0.77 (choice, $214.03) with moderate demand and light offerings, 127 loads (53 loads of choice cuts, 32 loads of select cuts, six loads of trimmings, 35 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL: Steady. Although limited bids and offers have developed, little direction is expected early Wednesday. Trade may be delayed until late in the week after the first of August.

FEEDER CATTLE: Feeder cattle trade focused on recent weakness in grain trade ($0.52 to $1.22 Higher). Initial pressure in feeder cattle markets was sparked by underlying softness through livestock markets. However, the strong pressure seen in corn trade Tuesday quickly brought buyers back to the table. This created underlying support in most nearby trade with September through November futures holding triple-digit gains. The underlying firmness is focusing on reduced production costs, although it is uncertain how much follow through support will develop at the end of the week.CME cash feeder index for 7/29 is $142.08, up $0.58.

LEAN HOGS:

Widespread liquidation continued, pushing markets sharply lower ($0.05 to $2.45 Lower). Active follow through pressure developed Tuesday, as traders not only focused on earlier pressure, but focused on the potential losses that may develop through the week. Even though there seems to be underlying support near current levels, the aggressive selling over the last couple of days is causing uncertainty that buying interest will be able to step into the market anytime soon. Pork values surged higher with strong ham and belly cut gains. Pork cutout values added $3.05 per cwt, moving to $87.09 per cwt on 298 loads. CME cash lean index for 7/26 is $80.36, up $1.50. DTN Projected lean index for 7/29 is $82.10, up $1.86.

WEDNESDAY'S CASH HOG CALL: Steady to $2 higher. Continued, but limited support is expected to be seen midweek with most bids steady to $1 per cwt higher during morning trade as packers secure needs for early August. Wednesday slaughter numbers are expected at 475,000 head. Saturday runs are expected at 34,000 head.

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