Strong market support in lean hog futures trade
has been the main focus early Tuesday. Triple-digit gains seen in all
nearby hog contracts have not only set the tone for higher price levels,
but this aggressive market support has sparked spill-over interest into
cattle markets during early-week activity. Corn prices are higher in
light trade. September corn futures are 4 cents higher. Stock markets
are lower in light trade. The Dow Jones is 250 points lower while Nasdaq
is down 92 points.
LIVE CATTLE:
Firm buying interest developed across the live
cattle market midmorning based on spillover support through the rest of
the complex. This helped to draw the most aggressive gains in December
and February live cattle trade, each holding 80 to 85 cent gains at
midday. Traders are looking for increased buyer activity firmness in
beef values has helped to solidify this market activity through the
entire complex early in the week and could potential to bring additional
stability into the cash market. Cash cattle markets remain undeveloped
at this point with show lists mixed, although generally larger as a
whole. Offerings are larger in Texas and Nebraska while slightly smaller
in Kansas and Colorado. Asking prices and bids are still generally
undefined and likely will be hard to pin point until the middle of the
week. With the holiday Monday, the overall progress will be delayed,
which may keep overall movement of cash markets sluggish through the
week. Beef cut-outs at midday are higher, $0.04 lower (select) and down
$0.91 per cwt (choice) with light movement of 78 total loads reported
(45 loads of choice cuts, 12 loads of select cuts, 6 loads of trimmings,
14 loads of ground beef).
FEEDER CATTLE:
Initial pressure seen in the feeder cattle
market was short lived with traders unwilling to focus on the previous
market pressure in the complex and moved into nearby contracts. Trade
has been sluggish through much of the complex with September contracts
holding a 70 cent gain as contracts focused on the firm support in live
cattle futures and underlying support through the rest of the livestock
market. There is firm support developing in all feeder cattle trade with
buyers holding all remaining 2017 contracts at $143 to $144 per cwt
while the expectation is that follow-through supply concerns will be
seen later in the year.
LEAN HOGS:
Aggressive market movement continues to hold
through the lean hog futures trade as gains in nearby markets are well
above $2 per through most of the morning. Traders are flirting with
limit higher trade at midday although at this point there has been no
significant push in order to move activity to that level. October
futures have moved past $64 per cwt with prices holding a $2.65 per cwt
rally with all contracts through the summer of 2018 holding triple digit
gains. Cash prices are higher on the National Direct morning cash hog
report. The weighted average price added $0.37 at $62.04 per cwt with
the range from $58.00 to $64.50 on 12,077 head reported sold. Cash
prices are higher on the Iowa/Minnesota Direct morning cash hog report.
The weighted average price added $0.28 at $62.56 per cwt with the range
from $58.00 to $64.50 on 4,789 head reported sold. The National Pork
Plant Report reported 177 loads selling with prices added $0.76 per cwt.
Lean hog index for 8/31 is at $72.39 down $1.13 with a projected
two-day index of $71.36, down $1.03.
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