Cattle futures have continued the downward price shifts seen last week as the strong market rally which developed Friday has essentially been erased. This is creating additional market pressure through the entire cattle complex with beef values mixed to mostly lower in the morning report. Hog futures are holding firm due to strong follow-through commercial buying activity moving into the complex. Corn prices are lower in light trade. July corn futures are 2 cents lower. Stock markets are higher in light trade. The Dow Jones is 81 points lower while Nasdaq is up 20 points.
LIVE CATTLE:
Live cattle futures have posted triple-digit losses at midday, although midday pressure has pulled back slightly from session lows seen earlier in the morning, the overall weakness in the market remains concerning for the market. There continues to be some underlying pressure developing through the market that could push front-month June futures even further. The focus on beef values through the week as well as the stability in cash markets will continue to be a major factor in sustaining commercial trade interest in the live cattle markets through the next several weeks. Cash cattle activity remains quiet Monday, which is expected as bids and asking prices are unavailable and will likely remain that way until near midweek. The sharp cash market slide last week may lead to additional market pressure in the next couple weeks following the pressure in futures trade and expectations that beef values will continue to erode through the week. Beef cut-outs at midday are mixed, $0.12 lower (select) and up $1.66 per cwt (choice) with light movement of 49 total loads reported (22 loads of choice cuts, 15 loads of select cuts, 4 loads of trimmings, 9 loads of ground beef).
FEEDER CATTLE:
Even though feeder cattle futures have backed away from session lows at midday, strong triple-digit pressure continues to hold as traders remain focused on market pressure, unwinding gains which developed Friday. The underlying market pressure seen in all cattle futures over the last week is creating a strong market push and is creating some concerning trends that would further damage the recent market support seen in both live cattle and feeder cattle markets.
LEAN HOGS:
Firm futures support is slowly developing in nearby contracts with the exception of the lightly traded May contract which continues to hold a 12 cent loss at midday. The underlying fundamental support seen across the entire complex has helped to bring additional commercial buyer support back into the market early Monday morning and hold prices higher, although market aggressiveness has been limited through the session. Consistent buyer activity has held with contracts in August through April 2018 contracts holding 40 to 50 cent gains at midday. Cash prices are lower on the National Direct morning cash hog report. The weighted average price lost $0.82 at $68.74 per cwt with the range from $66.00 to $70.50 on 3,668 head reported sold. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 124 loads selling with prices unchanged per cwt. Lean hog index for 5/10 is at $69.12 up $1.48 with a projected two-day index of $70.63 down $1.51.
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