Triple-digit losses have dominated feeder cattle futures early with selling nearly taking away the gains of yesterday. However, futures have regained some of those losses by midday. Live cattle future have followed suit, but not to the extent of feeders. October is barely hanging on to $113 after moving a bit lower earlier. There is some uneasiness after the interest rate hike from the Fed's yesterday as well as trade negotiations beginning with Japan. Selling activity is aggressive in lean hogs if front of the quarterly hogs and pigs report today. Corn is slight higher extending the gains of the past week. The Dow is up 155 points while the NASDAQ is 70 points higher.
LIVE CATTLE:
Trade discussions with Japan are on the minds of traders with the outcome key to continued strong exports to the country. This has delayed the threat of tariffs by the U.S. on Japanese auto exports to the U.S. However if talks do not turn out well, it could have substantial impact on beef exports to the country as anther trade war could develop. This is certainly too early to tell. There has been a bit more interest in purchasing cattle as more bids have been posted. However, no business has yet been done. Bids range from $109 to $1.1050 per cwt live basis while live dressed bids are $173 to $174 per cwt. Offers are $114 to 115 in the South and $180 and higher in the North. Boxed Beef cut-outs are mixed with (select) down $0.21 and (choice) up $0.02 per cwt. Movement is moderate at 85 loads (24 loads of choice cuts, 35 loads of select cuts, 5 loads of trimmings and 20 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures are under pressure with contracts rebounding from earlier triple-digit losses, but remain $0.55 to $0.75 lower. The nice price rebound yesterday is being trimmed likely in response to Japan trade talks and the Fed interest rate increase even though this may not have much impact. Traders are quick to take profits on outside news.
LEAN HOGS:
Trading activity is dominated by the upcoming Hogs and Pigs report to be released this afternoon. Front-month October is down $0.55 with December losses at $2.00. Traders are not too concerned about the impact on October, but are concerned about later supplies. The average analyst estimate for all hogs and pigs is 103.4 percent, kept from breeding at 103.1 percent, and kept for marketing at 103.5 percent. Cash prices are slightly higher on the National Direct morning cash report. The weighted average price is $0.17 higher at $63.31 with the range from $61.50-$64.00 on 4,335 sold. The National Pork Plant report posted 133 loads selling. Pork carcass valued slipped $0.19 per cwt settling at $80.68 per cwt. The projected 2-day lean hog index is $65.34, up $1.59.
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