Strong market weakness is expected to continue to develop through the complex. This may continue to be seen through the cattle and hog market as triple digit losses have been seen in all markets. There have been widespread concerns in cattle trade given the aggressive cash market pressure which have developed through the week. Beef and pork values have eroded Thursday, allowing traders to back away from the market. This may limit trade volume through the end of the session. Corn prices are lower in light trade. July corn futures are 5 cents lower. Stock markets are lower in light trade. The Dow Jones is 24 points higher while Nasdaq is up 21 points.
LIVE CATTLE:
Strong market pressure has continued to develop through the live cattle futures with losses of $1 to $1.50 per cwt seen at midday. This lack of support is developing based on the weakness in cash and beef values as traders continue to quickly and steadily back away from the market. There could be additional pressure seen in the market through the rest of the week as traders prepare for the upcoming cattle on feed report. Cash cattle trade continues to develop in the south at $120 per cwt through the morning even though overall trade remains generally light. This is another $2 per cwt lower than Wednesday's price levels, and accounting for total trade losses of $11 per cwt lower than last week. This could create additional wide pressure in the North also as additional trade is expected to develop before the end of the day. Even though the cattle on feed report will be released Friday, it is expected that cattle business will likely be done by the end of the day Thursday. Beef cut-outs at midday are lower, $1.00 lower (select) and down $0.95 per cwt (choice) with light movement of 76 total loads reported (39 loads of choice cuts, 15 loads of select cuts, 11 load of trimmings, 11 loads of ground beef).
FEEDER CATTLE:
Losses have slipped from early morning lows, but remain significant through the complex as traders continue to focus on morning pressure and the losses in cash markets seen during the week. It is expected that nearby contracts will hold losses near $2 per cwt through the rest of the session which will likely keep markets trading in a defensive pattern through the remainder of the week.
LEAN HOGS:
Pressure has continued to develop through the morning Thursday with traders focusing on nearby contacts with the most aggressive selling seen in August and October futures. This lack of buyer interest is not significantly impacting the overall lean hog market as a whole due to the lack of pressure on front month July contracts which is still trading at $85 per cwt. But the focus on position squaring following an aggressive run of cash market support and strong pork value surges seen in the last few days. This could limit additional buyer interest in the coming days, but may not keep buyers out of the market long term. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.32 at $85.48 per cwt with the range from $85.00 to $88.00 on 3,735 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $1.05 at $86.15 per cwt with the range from $85.00 to $87.00 on 930 head reported sold. The National Pork Plant Report reported 116 loads selling with prices falling $1.19 per cwt. Lean hog index for 6/20 is at $88.03 up $1.48 with a projected two-day index of $89.30 up $1.27.
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