Active pressure quickly developed in cattle futures Friday morning with traders slowly adjusting from sharp Thursday gains. Most of the softness is based on end-of-week postion taking. Hog futures are mixed following early gains. Traders have backed away from the complex allowing profit taking to develop after the sharp rally higher over the last few days. Corn futures are lower in light trade. May corn futures are 3 cents lower. Stock markets are higher in light trade. Dow Jones is 11 points higher with Nasdaq up 38 points.
LIVE CATTLE:
Aggressive pressure quickly moved through nearby lean hog trade with triple-digit losses seen in April through October contracts. This is adding even more uncertainty to the complex, although the market is holding support levels seen Thursday, creating most of the Friday losses to be based on position taking. This may add even more volatility early next week, but the ability to bring additional long-term support to the market could advance most contracts over the next couple of weeks. Cash cattle bids are seen in the North at $203 to $205 per cwt through the morning as packers are expected to increase activity through the net couple of hours. Trade is likely to need to develop in the North, although at this point, southern trade may have cleared enough numbers early in the week for both sides to call it a week and hold out until next week. Asking prices remain at $127 to $128 live, and $208 and higher dressed. Boxed Beef cut-outs at midday are mixed, $1.38 higher (select) and up $0.01 per cwt (choice) with active movement of 94 total loads reported (38 loads of choice cuts, 15 loads of select cuts, 36 loads of trimmings, 5 loads of ground beef).
FEEDER CATTLE:
Strong losses are quickly moving into feeder cattle trade following triple-digit losses in live cattle markets. Given the aggressive gains Thursday, the expectation is that most of the pressure is based on position taking at the end of the week. Even with Friday's moderate to firm price pullback the tone remains firm given the aggressive market reversal earlier in the week.
LEAN HOGS:
Limited gains have redeveloped midday following back-and-forth trade through the entire lean hog complex. The underlying tone of the market remains extremely bullish, given the aggressive $10 per cwt rally over the last two weeks. Traders continue to focus on increased underlying support from a trade deal that is reported to be getting closer to reality. This is creating expectations that additional pork will steadily move to China through the end of the year. Cash prices are unreported due to confidentiality on the National Direct morning cash hog report. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork values continue to firm following recent futures trade gains. Pork cutouts added $0.92 per cwt at $82.98 per cwt with 122 loads traded. Lean hog index for 4/2 is $77.70 up 0.92, with a projected two-day index is $78.26 up $0.56.
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