Sharp gains have continued to develop in feeder cattle futures as prices have held triple-digit support following the aggressive weakness in grain markets. Live cattle markets remain under light pressure due to overall lack of support in the complex and lack of market activity in nearby futures trade. Corn prices are lower in light trade. July corn futures are 11 cents lower. Stock markets are higher in light trade. The Dow Jones is 25 points higher while Nasdaq is up 14 points.
LIVE CATTLE:
Narrow losses are seen in live cattle futures trade at midday with very little direction developing across the complex. The inability to bring traders actively back into the market following strong morning gains in the feeder cattle markets as well as the surge higher in futures prices is creating some unsettled questions about just how much follow-through support buyer activity will be able to have through the next several weeks. Cash cattle trade has continued to develop in the North with live prices seen at $120. This is fully steady with price levels that developed Wednesday, and would be $2 per cwt higher than last week. Bids are seen at $188 to $190 dressed basis in the North. Trade is expected to be essentially wrapped up in the South, but some additional movement may take place in the North. Even if additional sales develop, the tone of the market is expected to have been set. Beef cut-outs at midday are lower, $0.43 lower (select) and down $2.12 per cwt (choice) with active movement of 149 total loads reported (82 loads of choice cuts, 47 loads of select cuts, no load of trimmings, 20 loads of ground beef).
Feeder Cattle:
Trade volume has remained choppy through the morning with prices generally higher, but still unable to gain significant support following the limit higher moves seen midweek. The aggressive follow-through pressure seen in the grain complex has allowed for increased buyer activity to move into the feeder cattle market with prices $1.20 to $1.80 per cwt higher in moderate trade. This latest market push has moved nearby contracts above $153 per cwt, which is the highest price level since early June. Additional underlying support could help to push additional firm buyer interest back into the market through the end of the session as well as through the end of the week.
LEAN HOGS:
Light buyer support is slowly stepping into the market as traders are focusing on the recent market stability in the complex. This may allow for additional market support and could allow for increased trade volume in the next couple of weeks. The pullback in both cash hog markets and pork values during the morning has limited the overall support in nearby futures activity, although traders remain focused on firm gains in late 2018 contract months at midday. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.58 at $86.26 per cwt with the range from $82.00 to $88.50 on 4,774 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price added $0.02 at $87.55 per cwt with the range from $82.00 to $88.50 on 1,752 head reported sold. The National Pork Plant Report reported 147 loads selling with prices falling $2.27 per cwt. Lean hog index for 7/11 is at $92.75 up $0.16 with a projected two-day index of $92.84, up $0.09.
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