Strong pressure is seen in the cattle complex with live cattle futures and feeder cattle markets quickly turning lower at midday. The lack of unified support through the morning in boxed beef values has created a swift change in direction in the market. Lean hog futures continue to hold strong gains as traders are holding aggressive market support with July futures maintaining triple-digit gains. Corn prices are higher in light trade. July corn futures are 5 cents lower. Stock markets are higher in light trade. The Dow Jones is 85 points higher while Nasdaq is up 40 points.
LIVE CATTLE:
Light to moderate pressure is quickly moving back into the complex following early buying support seen Tuesday morning. The support which developed in the complex was unable to hold. But with triple digit losses seen in feeder cattle futures, quick shifts have started to be seen in the live cattle markets with losses of 60 to 80 cent losses developing across the market. June futures are leading the complex lower with a 80 cent loss. This has now pushed prices below $128 per cwt with traders remaining focused on recent market uncertainty and the inability to keep traders actively engaged in the complex. Cash cattle activity is undeveloped as bids remain quiet Tuesday morning. Asking prices also remain quiet at this point with packers and feeders still trying to assess the overall market situation and look for the overall direction of futures trade as well as movement in the beef market through the week. It is likely that trade may not develop until midweek or later, although packers are expected to remain short bought once again going into the end of the week. Beef cut-outs at midday are mixed, $1.53 higher (select) and down $0.70 per cwt (choice) with light movement of 62 total loads reported (28 loads of choice cuts, 15 loads of select cuts, 13 load of trimmings, 6 loads of ground beef).
FEEDER CATTLE:
Buyer support seen early in the cattle market has quickly eroded as feeder cattle markets have now moved to triple-digit losses at midday. This turnaround in the complex may lead to additional strong market pressure and could easily pressure the entire cattle complex through the rest of the week. Even though trade volume remains light during late morning, traders seem to be focusing on trade weakness in both live cattle and feeder cattle markets.
LEAN HOGS:
Firm gains continue to hold in July lean hog futures with gains of $1.77 per cwt seen at midday. This is keeping prices at $82.47 per cwt as traders remain focused on the ability to draw additional trade back into the market. Firm support is seen in all nearby contracts with strong buyer support in cash markets during the Tuesday session. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $1.25 at $78.47 per cwt with the range from $76.16 to $81.00 on 6,096 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 247 loads selling with prices gaining $1.88 per cwt. Lean hog index for 6/9 is at $80.59 up $0.57 with a projected two-day index of $81.16 up $0.57.
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