Early selling in April lean hog futures gained momentum Tuesday with prices breaking through long-term support levels and setting contract lows. All nearby contracts traded $3 per cwt lower midday Tuesday. Cattle markets have shifted higher with traders looking for refuge from the hemorrhaging hog complex. March corn futures are 3 1/4 cents lower. Stock markets are higher in light trade. Dow Jones is 35 points higher with Nasdaq up 26 points.
LIVE CATTLE:
Aggressive gains flooded back into live cattle trade as traders who were fleeing the hog complex looked for refuge. This allowed for additional market support to move into all nearby trade, pushing April futures to new contract highs through the morning. April futures are holding a $1.82-per-cwt rally, at $129 per cwt, with firm support developing in all futures. Cash markets remain undeveloped early in the week with showlists steady to lighter this week in most areas. This could allow for increased firmness from feedlot managers when asking prices are seen later in the week. Bids and asking prices are unavailable and will likely be unavailable until midweek or later. The futures market volatility may add increased cash market shifts as the week continues. Boxed beef cut-outs at midday are higher, up $1.74 (select) and up $0.87 per cwt (choice) with light movement of 54 total loads reported (38 loads of choice cuts, 8 loads of select cuts, 3 loads of trimmings, 5 loads of ground beef).
FEEDER CATTLE:
Buyers quickly moved back into cattle trade Tuesday morning following the sharp pressure in hog contracts and lackluster interest in most outside markets. This led to triple-digit gains in feeder cattle futures, replacing late-week losses on Friday. Traders continue to look for longer-term market direction, which is adding some increased volatility in the complex. March futures are leading the complex higher with a $1.75 per cwt gain, based on support in live cattle trade.
LEAN HOGS:
Fueled by continued weak market fundamentals, initial selling stepped back into the complex. Within the first few minutes of trade, this broke through long-term support and contract lows in April futures, establishing a bearish market reversal in the complex. The weaker momentum has been too much to overcome in all nearby contracts with all contracts through August holding limit losses of $3 per cwt. It appears that the pressure is enough to hold prices at these lows through closing bell, which would allow expanded trading limits Wednesday. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.04 at $48.29 per cwt with the range from $44.50 to $49.00 on 7,419 head reported sold. Cash prices lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $0.27 at $48.38 per cwt with the range from $44.50 to $49.00 on 4,109 head reported sold. Pork carcass values slipped Tuesday following weakness in loin and belly cuts with prices falling $0.56 per cwt at $61.02 per cwt with 230 loads traded. Lean hog index for 2/15 is $54.74, down $0.28, with a projected two-day index is $54.43, down $0.31.
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