Sharp gains in lean hog futures trade has quickly bounced markets off of recent lows. The ability to hold this market support could quickly change the trend in the market and spark additional longer term buyer activity. Cattle markets remain firmly higher, although have quickly backed away from session highs. Corn prices are higher in light trade. May corn futures are 3 cents higher. Stock markets are higher in light trade. The Dow Jones is 335 points higher while Nasdaq is up 139 points.
LIVE CATTLE:
Firm support is still seen across live cattle futures midday Monday, but prices have quickly pulled back from strong triple-digit support that led the early market rally. It is uncertain at this point if this pullback will continue and leave markets unsupported and lower through the end of the session, or if buyers support will redevelop in the last hour of trade as several times is the case in. Trade volume has slowed considerably at midday as sharp gains in lean hog futures appear to have gained most of the attention late morning. Cash cattle interest is sluggish following last week's light trade activity. Although packers are entering the week with the expected need to gain access to additional cattle, it is uncertain if this will allow trade to develop earlier in the week or not. The firm buyer support may help to spark some early bids in the next couple of days. But at this point inventory taking and show list distribution is the only activity developing across the market. Boxed beef cut-outs at midday are mixed, $1.57 lower (select) and up $1.26 per cwt (choice) with light movement of 40 total loads reported (18 loads of choice cuts, 15 loads of select cuts, no loads of trimmings, 8 loads of ground beef).
FEEDER CATTLE:
Early triple-digit gains seen in cattle futures have eroded although the market continues to hold moderate gains at midday. Feeder cattle futures appear to have once again led this market shift as gains are seen from 35 to 90 cents per cwt. The break away from the aggressive gains early Monday seem to cause some getting used to be traders who are trying to quickly follow the firm market support in outside markets.
LEAN HOGS:
Buyers have quickly entered the market Monday following sluggish moves in the first few minutes of trade. The strong activity in the complex has allowed May through August contracts to trade over $2 per cwt higher. The potential exists to draw additional buyer support to the nearby contracts and test daily trading limits with a $3 per cwt gain. If this is done, significant market shifts could be seen through the end of the week. Traders seem willing and able to pull prices sharply off of recent market lows, but it is uncertain if long-term support will be able to hold. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.03 at $45.27 per cwt with the range from $44.00 to $46.00 on 4,615 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report posted 173 loads selling with carcass values falling $1.62 per cwt. Lean hog index for 4/5 is at $54.75 down 0.52 with a projected two-day index of $54.02, down 0.73.
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