Moderate price support is seen in cattle futures with traders focusing on firmness developing in both live cattle and feeder cattle markets. This is helping to draw prices higher at midday following early pressure. Lean hog futures remain under pressure, although early pressure has been significantly reduced through the morning as triple-digit losses early in the session have been erased. Corn prices are higher in light trade. December corn futures are 2 cents higher. Stock markets are higher in light trade. The Dow Jones is 14 points higher while Nasdaq is up 2 points.
LIVE CATTLE:
Live cattle futures have found additional strong buyer support midday Wednesday with traders focusing on additional activity in cash market starting to develop even though beef product values remain weak. The potential to stabilize the cattle complex following early week losses has helped to quickly energize commercial buying activity once again, which may help to allow traders to focus on follow through buyer activity over the next couple of days. There still remain underlying supply concerns in the coming months, but overall demand support has helped to keep traders from evacuating the market. Trade volume through the rest of the session is expected to remain light, although firm support is likely to hold until closing bell. Cash cattle market activity is beginning to become more focused with bids and asking prices more evident through the morning. Bids are available at $102 to $103 live and $162 to $164 dressed, while asking prices have been seen at $108 and higher in the South and $107 to $108 live/ $170 and higher in the North. Trade is still possible to be delayed until sometime Thursday or Friday, but the fact that interest is developing is starting the ball rolling. Activity on the Fed Cattle Exchange Auction was light with a total of 1,063 head offered while 128 head were sold. This accounted for one lot of heifers in Kansas sold for 1-9 day delivery at $104.75 per cwt. Beef cut-outs at midday are lower, $1.49 lower (select) and down $0.07 per cwt (choice) with moderate movement of 88 total loads reported (45 loads of choice cuts, 15 loads of select cuts, 4 loads of trimmings, 23 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures have bounced higher and lower through morning trade with early aggressive losses quickly giving way to narrow gains as traders focus on building support in the live cattle complex. The potential for buyers to step back into deferred contract months has created some additional underlying support through the complex and could help to bring additional momentum over the next few sessions based on firm commercial buying activity in the entire cattle market. September futures are currently holding a 10 cent loss, while the rest of the market remains 10 to 35 cents per cwt higher in light trade, focused on the potential direction of movement in the live cattle market during late day trade.
LEAN HOGS:
Moderate pressure has held through lean hog futures contracts with October contracts leading the market lower at midday with a 50 cent loss. Although front-month October contracts have cut initial losses by more than half the overall lack of support in the hog complex continues to limit buyer support through the month of September. The rest of the market remains extremely sluggish as prices are steady to 30 cents lower as traders are attempting to build some stability back into the complex through the end of the week. This is creating even more uncertainty as market fundamentals remain weak given the lack of cash market movement while overall pork demand has remained extremely resilient. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.16 at $54.75 per cwt with the range from $51.00 to $56.00 on 6,258 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $1.14 at $54.70 per cwt with the range from $51.00 to $56.00 on 3,258 head reported sold. The National Pork Plant Report reported 271 loads selling with prices gaining $1.00 per cwt. Lean hog index for 9/11 is at $67.37 down $0.54 with a projected two-day index of $67.37, unchanged.
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