Limit lower lean hog futures has continued to add pressure to the entire hog market. The combination of weaker futures and lower cash markets is leaving the market unsupported. Cattle trade is mixed with nearby gains being offset by light to moderate deferred pressure. Corn prices are lower in light trade Tuesday. July corn futures are 2 cents lower. Stock markets are mixed in light trade. The Dow Jones is 4 points lower while Nasdaq is up 70 points.
LIVE CATTLE:
Cattle futures have bounced higher an lower through the morning with very limited long-term direction seen across the complex. Nearby contracts are holding gains of 20 to 60 cents per cwt, with increased movement developing in the entire complex. Prices have shifted higher and lower in a wide range through most of the morning with very little long-term direction developing at this point. The lack of support in beef values seems to have very little indication as to just how much additional movement will develop in the next couple weeks. There could be some market shifts developing as deferred contracts continue to hold an aggressive premium to the current spot month contract. Cash cattle trade is still quiet with bids slowly increasing through the morning. Bids are seen at $108 live and $173 to $175 dressed, but this is still well below asking prices of $115 live and $183 dressed. It is expected that trade will not be seen until later in the week with Friday trade very likely. The Fed Cattle Exchange Auction today listed a total of 2,125 head, with 1,469 actually sold, with a weighted average of $110.00, 495 head listed as unsold, and 161 head listed as PO (Passed Offer). The only states with cattle on the list were Kansas and Nebraska, the breakdown looks like this: KS 656 total head, with zero head sold, 495 head unsold, 161 head listed as PO ($112.00); NE 1,469 total head, with 1,469 head sold at $110.00, zero head unsold, and zero head listed as PO. All cattle listed are for 1-9 day delivery. Boxed Beef cut-outs at midday are lower, $1.39 lower (select) and down $0.30 per cwt (choice) with light movement of 92 total loads reported (47 loads of choice cuts, 20 loads of select cuts, 13 loads of trimmings, 11 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures are mixed in a very narrow trading range at midday Wednesday. The limited direction seen at the end of the morning seems to be somewhat confusing given that prices have bounced higher and lower in a moderate to wide range over the last few hours of trade. Currently all contracts are hovering within a 20 to 30 cent range with August futures holding 22 cent losses, while deferred contracts are as much as 7 cents per cwt higher. This lack of movement seems to focus on the lack of direction in outside markets despite aggressive pressure seen in hog trade.
LEAN HOGS:
Limit Daily trading ranges have been hit in August contracts with a $3 per cwt loss seen through the morning. This is creating widespread pressure through the entire complex with traders looking for increased overall movement across the complex and additional uncertainty in many other contracts. The follow through pressure after prices tumbled to triple digit losses Tuesday has further weakened overall market activity in all contracts. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.67 at $82.46 per cwt with the range from $76.00 to $83.50 on 3,520 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $1.15 at $82.20 per cwt with the range from $76.00 to $83.50 on 1,080 head reported sold. The National Pork Plant Report posted 154 loads selling with carcass values gaining $0.16 per cwt. Lean hog index for 6/18 is at $84.05 up 1.19 with a projected two-day index of $85.14, up 1.09.
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