Moderate to strong gains quickly developed in livestock futures Tuesday. The entire complex was seen oversold during the past week following aggressive price reductions. The support seen in the market is struggling to find additional interest, which may limit long-term support. Corn prices are mixed in light trade. May corn futures are steady Tuesday. Stock markets are higher in light trade. The Dow Jones is 145 points higher while Nasdaq is down 29 points.
LIVE CATTLE:
The move away from sharp losses seen over the last few trading sessions has quickly drawn more buyers to the market. This is expected to help support the overall complex through the rest of the week despite concern of additional pressure that may develop through the rest of the week. Prices in nearby contracts at midday still remain firmly higher, but have quickly backed away from previous session highs seen early in the session. This may add late day pressure as traders look for potential buyers to step back into the market. But it may be hard to find additional participants. Cash cattle trade is still quiet with asking prices undeveloped at this point. There are a few token bids starting to develop through the morning with live bids entering the market at $118 to $121 per cwt with dressed bids at $198 per cwt. It is expected that asking prices will be well above these levels, although solid asking prices may not be seen until sometime Wednesday. Boxed beef cut-outs at midday are mixed, $0.36 lower (select) and up $0.57 per cwt (choice) with light movement of 53 total loads reported (29 loads of choice cuts, 14 loads of select cuts, no loads of trimmings, 10 loads of ground beef).
FEEDER CATTLE:
Strong gains continue to hold across the cattle complex Tuesday morning with the feeder cattle market leading the upward price surge. Prices posted strong triple digit gains in most contracts through much of the morning. Even though markets have pulled back from early session highs, the firm buyer support in the complex continues to hold. This is keeping April contracts $1 per cwt higher with very limited focus on the need to erode these prices at this point. There still is some concern that current buyer support may be unable to hold through the end of the day given the light volume expected to be seen in the last hour of trade. This could leave markets shifting in a moderate range just before closing bell.
LEAN HOGS:
Firm buyer support is moving into the complex with 70 to 90 cent gains holding at midday. The aggressive move higher in cattle trade has slowly but firmly eroded initial selling pressure and replaced that with moderate buyer activity as the day continues. The current gains do very little to build any long-term support in hog futures where prices have moved sharply lower over the last month. Even if prices are able to find solid support near $58 per cwt, the ability to bring traders back to the table in the near futures is an additional challenge completely. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.26 at $51.78 per cwt with the range from $48.00 to $52.19 on 3,157 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $0.74 at $50.48 per cwt with the range from $48.00 to $51.25 on 460 head reported sold. The National Pork Plant Report posted 210 loads selling with carcass values slipping $0.61 per cwt. Lean hog index for 3/23 is at $61.35, down 0.97 with a projected two-day index of $60.58, down 0.77
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