Strong morning pressure has developed in lean hog futures trade as the initial market support quickly evaporated. This may add some additional underlying pressure through the entire complex as triple digit losses are seen in February and April futures. Corn markets are higher in light trade. December corn futures are 5 cents higher. Stock markets are higher in light trade. The Dow Jones is 188 points higher while Nasdaq is up 74 points.
LIVE CATTLE:
Live cattle futures have moved from light to moderate gains, to a narrowly mixed trading range at midday following moderate to strong pressure in the rest of the livestock complex. The fact that lean hog future are holding sharp morning losses is creating additional underlying weakness on the live cattle market. Traders are focusing most of their efforts on outside market moves, although the focus on firming beef values is helping to limit losses through nearby trade. Cash cattle activity remains undeveloped with show list distribution and inventory taking through the morning. Active trade is expected to be pushed off until the last half of the week with bids and asking prices not expected to be fully established until Wednesday or later. Boxed Beef cut-outs at midday are higher, $0.97 higher (select) and up $0.51 per cwt (choice) with light movement of 61 total loads reported (34 loads of choice cuts, 9 loads of select cuts, 8 loads of trimmings, 10 loads of ground beef).
FEEDER CATTLE:
Moderate pressure is seen in feeder cattle trade as buyers who initially stepped into the complex Monday morning have slowly but steadily backed away from any buying position at midday. The focus is currently on the optimism in the grain complex, and the moderate to strong buyer support in both corn and soybean markets negatively impacts feeder cattle trade due to higher production costs. January futures are holding limited losses of 12 cents per cwt, while all other nearby contacts are 50 to 65 cents lower in very limited trade Monday morning.
LEAN HOGS:
Sharp triple-digit losses have quickly developed across the lean hog complex with traders focus on the inability to sustain early morning gains following the positive trade talks between China and the U.S. Although some support is expected to be seen in the hog market with a positive relationship and agreement built between the two countries, traders in the hog complex are realizing that most of the emphasis is on the soybean complex and this will increase production costs for domestic needs. Nearby contracts are most impacted in the morning market shifts with February and April contracts holding triple-digit losses, while light to moderate price pullbacks are seen through the rest of the complex. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is $0.40 higher at $50.16 per cwt with the range from $45.00 to $50.55 on 4,070 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork carcass values gained $2.64 per cwt at $71.76 per cwt on 136 loads. Lean hog index for 11/29 is $56.42, down 0.14, with a projected two-day index is $56.36, down 0.06.
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