GENERAL COMMENTS:
Livestock futures could not uncover solid support Monday. All cattle contracts closed lower, while lean hog futures closed mixed. Bids and offers have yet to be established with buyers waiting to see the showlists for the week. Feedlots may be waiting to see how aggressive buyers need to be before increasing offerings. Any help from futures for higher bids was a big disappointment Monday. Mixed prices for boxed beef cutouts provided no support. Cattle could not even garner any interest in buying from the strength of some of the outside markets. Hogs showed some strong spreading activity between October and December with similar trading volume between the two contracts. According to the National Daily Direct hog afternoon report, the national hog base is $0.13 higher ($44-$46, weighted average $48.08). Corn futures gained 5 1/4 cents. The Dow Index closed 143 points lower with the NASDAQ down 23 points lower.
LIVE CATTLE:
Live cattle futures opened near where they closed last week and made a valiant attempt to extend the gains of last week. However, early buying interest dried up with futures falling back, suffering double-digit losses. The concern of mixed-to-lower cutout values and possible slowing demand may keep the market on the defensive. Beef cutouts were lower. Choice was $0.26 lower at $220.62 with select $2.03 lower at $196.57. There were 101 loads with choice cuts at 54 loads, select cuts at 27 loads, trimmings at six loads, and ground beef at 14 loads.
TUESDAY'S CASH CATTLE CALL:
Steady. Early week trade is not expected with bids and offers not yet established. Showlists will be distributed, providing an idea of offerings.
FEEDER CATTLE:
Futures were nearly a mirror of live cattle, posting similar price movement and similar losses. It seems chart resistance may be difficult to break above unless live cattle provide a catalyst for price movement.
LEAN HOGS:
Spread trading in October and December was very active with the spread moving apart by $4.82. The ideas that the potential for China to purchase a large quantity of pork might have a greater potential in December rather than October increased the magnitude of spread. Pork cutout values gained $1.62 per cwt, moving to $69.83 per cwt. There were 132 loads of cuts and seven loads of trim/process. The lean hog index for 9/12 is $59.71, down $0.98. The projected lean hog index for 9/13 is $58.48, down $1.23.
TUESDAY'S CASH HOG CALL:
Steady to $1 lower. Buyers will be watching for any signs of improved cash values before stepping up to the plate more aggressively. Struggling cutouts will keep a lid on prices.
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