Moderate to strong gains have developed through the livestock markets with traders focusing on pressure in live cattle and lean hog trade which are each posting triple-digit losses in nearby contracts. The lack of support in futures contracts as well as uncertainty in meat values during the morning is causing some concern across the entire complex. Corn prices are higher in light trade. July corn futures are 1 cent higher. Stock markets are lower in light trade. The Dow Jones is 27 points higher while Nasdaq is down 50 points.
LIVE CATTLE:
Moderate to sharp pressure has redeveloped across live cattle futures at midday as front month June contracts leading the complex lower with a $1.90 per cwt loss. This move lower has offset early market gains that moved into the complex. Other nearby contracts are holding narrow losses of 20 to 40 cent losses in light trade as traders continue to focus on potential cash market activity through the end of the week despite previous market weakness in futures trade. The potential that front month futures could continue to erode through the end of the trading session due to expanded futures trade may spark additional volume late Thursday. Cash cattle trade has been reported in Kansas through the morning with light scattered activity seen at $128. This is $9 per cwt lower than last week. Activity through the rest of the country remains very quiet with bids seen at $128 in Texas, and generally undeveloped in the North. Asking prices are seen at $132 in the South and $212 and higher in the North. Packer interest is expected to increase through the end of the day but trade may not be active until late in the week. Beef cut-outs at midday are lower, $0.77 lower (select) and down $0.58 per cwt (choice) with light movement of 62 total loads reported (32 loads of choice cuts, 17 loads of select cuts, no load of trimmings, 14 loads of ground beef).
FEEDER CATTLE:
Moves in the feeder cattle complex have been choppy through the entire complex with trade moving higher and lower during the morning with very little significant reason for the market shifts during the first few hours of trade. Early wide market shifts has added moderate volatility, but has been muted compared to the aggressive moves earlier in the week. Narrow losses are seen at midday as light volume seem to be adding a calmness to the market with nearby futures trading 17 to 40 cents per cwt lower. The potential to draw light buyer support back into the market ahead of closing bell still exists, and could spark some renewed positioning in nearby contracts.
LEAN HOGS:
Initial buyer support which slowly stepped into the lean hog futures complex has quickly eroded through lean hog futures as nearby contracts have posted as much as $1.50 per cwt losses through late morning. July futures are taking over as front month contracts but markets remain lightly traded most of the morning as contracts are holding narrow losses of 50 cents per cwt holding at $82.10 per cwt. August futures are trading at $79.02 per cwt, falling below the $80 per cwt threshold, creating a bearish market shift in the complex even though strong fundamental support remains across the market. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $1.05 at $83.32 per cwt with the range from $78.00 to $86.00 on 4,920 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 108 loads selling with prices falling $0.51 per cwt. Lean hog index for 6/13 is at $82.10 up $0.94 with a projected two-day index of $82.93 up $0.83.
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