Tuesday Morning Livestock Market Summary - Mixed Trade Expected Early

GENERAL COMMENTS:

Tight corn supply is expected to bring light-to-moderate pressure in feeder cattle trade Tuesday. The latest Crop Progress report released Monday posted total corn planted acres at 49%. This is the lowest level at this date on record. The uncertainty of how this will impact overall production is causing concern by cattle feeders, and directly impacting prices paid for feeder cattle. Live cattle is expected mixed in a narrow-to-moderate range with limited livestock market direction expected in the next couple of days with the main focus on outside market moves. Cash cattle trade is undeveloped at this point and likely will not show significant activity until midweek or later. A few token bids may start to develop, but asking prices may not show up until Wednesday or later.

Lean hog futures appear to be settling into a moderate market range after firmly pushing prices off support levels last week. Mixed trade is likely through much of the session with little new market developments available for either side to hang onto. The overall focus continues to remain generally bullish on the expectation that domestic and global demand will remain firm and continue to grow in order to replace production lost by African swine fever. But the uncertainty surrounding trade with China and overall financial market uncertainty continues to limit active buyer support. Cash trade is called steady to $1 lower Tuesday morning with most bids steady. Expected slaughter Tuesday is at 466,000 head

	BULL SIDE		BEAR SIDE
1)	Firm underlying support is expected to develop in wholesale beef values in the upcoming days. This is helping to solidify buyer support through the entire live cattle complex.	1)	Corn planting is at the slowest pace on record, with just 49% of corn planted at the end of last week. This is the lowest level at this date on record, and is expected to further impact cattle production costs the rest of the year.
2)	Firm market support has moved June futures well above last week's support levels of $109.50 per cwt. This rally of nearly $2 per cwt is expected to bring additional underlying technical support back to the cattle market.	2)	Lack of active buyer support by noncommercial traders moving back into the live cattle complex could limit the upward movement in the entire live cattle market.
3)	Moderate-to-strong market support in pork cutout values has helped to bring some underlying stability to the complex as traders focus on summer demand and improved values in these typical summer cuts such as ribs and bacon.	3)	Cash hog values are expected to struggle this week as packers aggressively attempt to reduce production runs in order to firm up plant margins. This will mean less need for negotiated hog trade, limiting overall spending by packers.
4)	Continued strong buyer support is driven by buying in late 2019 and 2020 contracts as traders focus on long-term demand support is expected to develop in domestic and export markets.	4)	Despite expectations of strong long-term pork demand, the relationship with China continues to cast dark shadows in the entire pork complex. Limiting nearby price support, and could likely cause short-term and long-term market moves to shift in different directions.

#completecalfcare