Cattle futures have quickly backed away from early market pressure with markets mixed to moderately higher at midday. The buyer support is based more on short covering activity at the end of the week rather than any longer term change of direction. Hog futures remain stuck in the lower trend due to extremely light volume. Corn prices are higher in light trade. September corn futures are 2 cents higher. Stock markets are higher in light trade. The Dow Jones is 23 points lower while Nasdaq is up 30 points.
LIVE CATTLE:
Mixed trade is seen in live cattle futures with prices stuck in a narrow trading range. Buyers have stepped back into the complex based on short covering activity in front of the weekend, and not based on a change in market direction. This could help to bring some needed market stability back to the complex, but for now, it appears that most traders are focusing on weaker fundamentals still driving the future movement of the complex. Cash cattle market activity remains quiet with a few live bids developing in Nebraska at $109 per cwt. The light to moderate trade seen Thursday is expected to be enough to cover packer's needs at this point. Sales for the week have settled at $110 in the South and generally $175 in the North. Beef cut-outs at midday are lower, $1.70 lower (select) and down $0.57 per cwt (choice) with active movement of 80 total loads reported (56 loads of choice cuts, 8 loads of select cuts, no loads of trimmings, 16 loads of ground beef).
FEEDER CATTLE:
Moderate buyer support has moved into the feeder cattle futures late morning Friday following strong early pressure which continued the downward market trend across the complex. There is expected to be some additional follow through support based on the short-covering activity that is now developing. Even though the overall tone of the cattle market remains extremely weak, the push higher in feeder cattle market has posted gains of 10 to 80 cents per cwt. Most traders are squaring positions in front of the weekend, rather than focusing on any changing direction in the market.
LEAN HOGS:
Narrow market movement has been seen through the entire morning in lean hog futures trade with front month October holding a $1.10 loss as traders remain focused on the lack of cash market support and bearish movement through the cattle market. Even though pork values bounced higher at midday, the inability to draw additional buyer support back into the market at the end of the week will likely create even more pressure through the complex. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $2.25 at $73.15 per cwt with the range from $69.00 to $75.00 on 3,197 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 143 loads selling with prices adding $1.06 per cwt. Lean hog index for 8/16 is at $87.70 down $0.33 with a projected two-day index of $83.19, down $0.51.
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