Wall Street appears poised to open weak on uncertainty over Greece's newest bailout and concerns world economic growth may fall short of earlier expectations.
Cash cattle. USDA reported inactive negotiated cash trade Tuesday on light demand in all feeding regions.
Last week's cash cattle traded as high as $129.50, a new all-time record and just shy of $130, an all but unthinkable price for cattle just a few years ago. Prices for cattle have touched records in the last several months due to a combination of strong beef demand, tight supplies following a drought in the southern plains and excess slaughter capacity among meat processors.
Asking prices this week are reported at $132 to $134 in Texas and $130 or higher in Kansas.
No bids are seen yet.
Sales prices last week were at $129 in Texas and $128 in Kansas. In Nebraska, sales were from $127 to 129.50 live and $202 to mostly $203 dressed. Prices in both areas were up $5 cents a pound from the previous week, a jump that took many investors by surprise.
USDA estimated Tuesday's cattle slaughter at 126,000. The 230,000 cattle slaughtered so far this week are down from 247,000 last week and 243,000 a year ago.
Some analysts predict the week's slaughter will be reduced to 600,000 head or fewer from last week's figure of 616,000 head. Others expect the week's total to be between 600,000 and 610,000 head based on speculation that packers have forward sales on their books and will need to process enough animals to fill those commitments.
At midday Choice cutout was up $1.66 with Select up $2.39. Tuesday afternoon boxed beef cutout values were sharply higher on moderate demand and light offerings. Choice was up $2.34 at $194.15. Select surged $2.77 to $191.15. Load count totaled 160. Select-beef set a new all-time high for that grade.
Choice-grade beef prices are nearing $195, a level that historically has led to evidence of price sticker shock among consumers. So investors will be watching to see whether retailers, who are nearing the traditional start to the spring grilling season, will continue paying elevated prices.
Nebraska feedlots are offering 1,000 less cattle than last week. Kansas show lists are down 3,000, while Texas lists are up 2,000.
Smaller show lists and higher cutouts have feedlots asking higher prices this week. Still, early predictions for cash-cattle prices this week are mostly steady following last week's spike to record highs.
In order for the cash markets to move any higher this week, futures prices and wholesale beef values need to climb further and maintain the strength through Friday.
Some traders continue to point to warning signs for cattle prices in coming weeks and months. Profit margin estimates at beef processors remain in negative territory, a dynamic that has led packers to cut meat production in recent months, shrinking their demand for cattle.
Average slaughter weights continue to rise. One potential contributor to heavy cattle is a prolonged spell of mild winter weather, which makes for highly efficient cattle-growing conditions. But rising weights can also be a sign that cattle owners are beginning to face a backlog of inventory--a trend, if true, that could eventually lead to forced sales by stressed cattle feeders.
The CME listed no new notices to deliver on the soon-to-expire February fed cattle contract Friday.
The latest HedgersEdge packer margin index was minus $40.95 per head, compared with minus $13.70 the previous day. This is an estimate of packer returns on cattle slaughtered and processed expressed in the form of an index.
Cattle futures. Fed cattle advanced Tuesday following record-high prices in cash cattle markets on Friday.
Some investors taking profits limited gains. Other investors repositioned books to reflect growing fears that simmering geopolitical tension in the Middle East could lead to a spike in oil prices. High gas prices can be bearish for the beef business if they force consumers to switch to lower-priced meats.
Steadily climbing beef prices have helped underpin the rally in futures and cash markets. Beef prices have been steadily rebounding in recent weeks following a cut in meat production by beef packers, a move that has tightened inventories and helped processors narrow their negative profit margin estimates.
February closed 30 cents higher at $128.90, a fresh record high for the spot contract. April advanced 22 cents to $131.12.
Feeder cattle advanced with March up 17 cents at $158.60. April gained 37 cents to $160.85.
Cash hogs. Expectations for prices the balance of the week are mostly steady. Supplies of slaughter-ready animals and demand appear to be generally well in balance.
However, trade chatter hints that a few packers may bid more aggressively for hogs as the week progresses since supplies are seen undergoing a seasonal reduction. Plus grocers may want to feature pork since beef prices are moving up sharply.
Tuesday's hogs sold higher in the west, but weaker in the east.
USDA's afternoon reports showed Tuesday's:
* Iowa-Minnesota hogs gained 97 cents to average $85.89.
* Western Corn Belt hogs advanced 90 cents to average $85.74.
* Eastern Corn Belt hogs fell $1.42 to average $81.82.
Price changes are compared to USDA's prior day report for Monday.
USDA reported last week's Iowa-southern Minnesota barrows and gilts averaged 276 lbs., up 0.1 lb. from the previous week and well above the 273.1 lbs. a year ago.
Following Monday's reduced slaughter, estimated at 376,000 head with three plants closed for the day, Tuesday's slaughter rebounded to 422,000 head. Early projections for Saturday's figure range from 80,000 to 90,000 head. The initial predictions for the week's total are around 2.125 million, give or take a few thousand.
Plunging bellies offset surging hams to trim Tuesday's cutout 39 cents to $86.07. Load count totaled 148.
Dow-Jones estimated Monday's packer margin at minus $4.34 per head, compared with minus $1.50 per head Monday.
Terminal hogs sold steady to $1 higher. Live tops ran $58 to $60.50.
Hog futures. Lean hogs finished mostly lower Tuesday, pressured by unsteady wholesale pork prices and signs that demand doesn't justify current values for futures.
Lean hog futures continue to reflect soft demand for pork, which has yet to show sharp signs of a seasonal uptick.
Pork prices and hog markets have mostly avoided big overall declines. Still, they continue to trail last year's record-setting prices, which were fueled by a combination of firm domestic demand and a broad surge in exports.
Pork prices are about $5 below last year. Still traders expect firmer pricing with time as Easter demand emerges. Pork prices typically rebound in January or February as processors begin filling holiday ham orders. Supplies, meanwhile, decline seasonally throughout spring, leading to smaller slaughter rates and tighter meat inventories.
April hogs fell 55 cents to $89.82. Losses were deepened as April hogs fell through their 200-day moving average, a closely watched technical indicator. May hog futures fell 17 cents to $98.72.