Monday Closing Livestock Market Summary - Lean Hogs Bounce Significantly Higher as Trade War Fears Ease

GENERAL COMMENTS

Feedlot country put in a typically slow Monday with the distribution of new showlists the only order of business. Ready numbers look generally larger, with only Colorado offering fewer fed steers and heifers. According to the closing report, the national hog base is $0.44 higher ($42-$47, weighted average $45.60). The corn market closed generally 2 cents higher, supported by higher bean and wheat action, as well as positioning ahead of new s&d tables set for release Tuesday. The stock market closed higher (e.g., the Dow gained 46 points; the Nasdaq advanced by 35), but well off session highs. Some blamed late selling on a report that FBI officers had raided the office of President Donald Trump's personal lawyer.

LIVE CATTLE

Although the board opened with a surprising show of strength, buying ran out of steam in the final hour and contracts settled no better than mixed. When the dust cleared, live contracts closed up 17 to off 25. Given the lack of grit and stamina, it would appear that many traders remain nervous about early spring beef demand and the likelihood of building fed numbers through the second quarter. Beef cut-outs: widely mixed, up $0.73 (choice: $215.04) to off $2.46 (select: $203.14) with light-to-moderate demand and offerings (30 loads of choice cuts, 32 loads of select cuts, zero loads of trimmings, 16 loads of ground beef).

TUESDAY'S CASH CATTLE CALL:

Steady to $2 lower. Tuesday has become a popular day to at least test cash waters, often encouraged by feedlot managers and hedgers who want to take advantage of strong opportunities. The late sell-off in live futures may make such early week biz all the more likely.

FEEDER CATTLE:

Feeder futures proved to be another market when bulls should have snapped the camera early instead of late. Prices settled mixed, up 35 to off 87, butt 300-400 points below the high scored with the early bullish wave. On an estimated run of 4,400 head (up from 1,912 last week but below 8,207 in 2017), Oklahoma City sold feeder steers and heifers $26 higher than two weeks ago (instances $10 higher). CME cash feeder index: 04/ 06: $134.49, off $0.92.

LEAN HOGS:

Although soon-to-expire April was limited by further evidence of cash erosion (i.e., closing 77 points higher), the rest of the complex finished sharply higher (i.e., up 130 to 285). Buying was encouraged by a general easing of trade war concerns. Furthermore, some have noted that the aggregate tariff on pork exports of China would be somewhat less than a 25% increase since the tariff schedule apparently varies from cut to cut (e.g., some items were already charged a 20% tariff before all the squabble began; some items like pig feet are still not taxed at all). The carcass value closed modestly lower with further sagging in belly demand (the belly primal closed another $6.32 lower) nearly offset by better demand for all other cuts. Pork cut-out: $70.20, up $0.48. CME cash lean index for 04/05: $54.75, off $0.32 (DTN Projected lean index for 04/06: $54.02, off $0.73).

TUESDAY'S CASH HOG CALL:

Steady. Cash fundamentals may be slowly beginning to improve, especially in terms of supply.