GENERAL COMMENTS:
The livestock complex has become consumed with a lower tone in Tuesday's market. Both the live cattle and lean hog contracts have some rational to their regression thanks to a lousy cash cattle market and a disappoint hog slaughter on Monday. More than anything, however, it's seeming like the market is holding its breath to see what happens between the U.S. and China as Nancy Pelosi visits Taiwan. December corn is down 8 3/4 cents per bushel and December soybean meal is up $5.80. The Dow Jones Industrial Average is down 37.73 points.
LIVE CATTLE:
The live cattle market is overcome with the same sense of caution as the rest of the livestock complex. It's not helping the market that boxed beef prices are lower and that the cash market isn't expected to trade anything better than steady this week. August live cattle are down $0.17 at $136.57, October live cattle are down $0.40 at $142.22 and December live cattle are down $0.12 at $148.37. Asking prices are starting out at $137 in the South and the North has yet to disclose what they'd like to see. It's unlikely that any cash cattle trade begins until Wednesday as packers look to see what develops in the China-U.S. situation; any negative developments will give them more reason to slash cash prices.
Boxed beef prices are lower: choice down $1.45 ($269.15) and select down $0.59 ($242.31) with a movement of 79 loads (37.52 loads of choice, 16.29 loads of select, 9.38 loads of trim and 15.37 loads of ground beef).
FEEDER CATTLE:
As the corn market continues to drift $0.07 to $0.08 lower, one would think that the feeder cattle market would trade higher, but as traders keep a safe distance from the marketplace amid outside pressures, feeders are scaling lower into Tuesday's afternoon. August feeders are down $1.52 at $178.12, September feeders are down $1.52 at $181.60 and October feeders are down $1.30 at $184.17. Unfortunately, without any support stemming from the live cattle complex, it's unlikely that the market will be able to close higher even as corn trades lower and as feeder continue to bring more money in sales throughout the countryside as the market seems fixated on one thing and one thing only -- what's China going to do next?
LEAN HOGS:
The lean hog complex hasn't seen much interest from packers, which the market was hoping to wake up to as it needs to find something positive in Tuesday's market to overcome Monday's measly slaughter pace of 408,000 head. Packers are still expected to buy aggressively this week in the cash hog market as supplies are thin -- if not throughout Tuesday's market, then almost certainly on Wednesday and Thursday's market. Midday pork cutout values are higher, which is necessary to keep the market from fainting lower amid weaker slaughter speeds. If Tuesday's slaughter runs as faintly as Monday's did, then a lower tone could be setting into the complex. August lean hogs are down $0.55 at $119.90, October lean hogs are down $0.90 at $95.92 and December lean hogs are down $0.35 at $87.37.
The projected lean hog index is unavailable at this time. Hog prices are higher on the Daily Direct Morning Hog Report, up $0.70 with a weighted average of $115.63, ranging from $113.50 to $131.00 on 4,367 head and a five-day rolling average of $124.15. Pork cutouts total 165.23 loads with 156.78 loads of pork cuts and 8.45 loads of trim. Pork cutout values: up $2.52, $130.22.
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