Limited activity is seen Friday morning as
traders try to gingerly step into the complex following aggressive
losses through the last couple of days. Mixed trade is seen across the
complex as traders focusing more on end-of-the week positioning and
short-covering activity than on finding additional market direction.
Corn futures are higher in light trade. July corn futures are 5 cents
higher. Stock markets are higher in light trade. Dow Jones is 23 points
lower with Nasdaq up 2 points.
LIVE CATTLE:
Limited morning trade is keeping live cattle
futures stuck in a narrowly mixed trading range. Nearby futures re
holding prices steady to 30 cents lower, while nearby trade is posting
limited gains. The underlying weaker tone seen through the week
continues to hold, although traders see very little incentive to
continue to push prices lower given overall fundamental structure and
expected beef demand is not nearly as bearish as recent technical shifts
indicate. Traders are comfortable remaining on the sidelines through
the end of the week with limited positioning being done. The focus early
next week will be on the ability to stabilize on recent market levels
and build support from current price levels. Cash cattle trade appears
to be wrapped up for the week following light to moderate trade in the
South Wednesday and moderate to active trade through the North Thursday.
Bids are undeveloped although asking prices on any cattle left on
Showlists appear to be $128 and higher live and $206 to $207 dressed.
Boxed Beef cut-outs at midday are lower, $0.79 lower (select) and down
$0.03 per cwt (choice) with light movement of 43 total loads reported
(27 loads of choice cuts, 10 loads of select cuts, no loads of
trimmings, 6 loads of ground beef).
FEEDER CATTLE:
Buyers are stepping back into the complex Friday
morning, but the underlying tone of the market remains weak after sharp
losses during the week. Most of the upward market ticks have been
driven by end-of-week short covering. May futures are leading the
complex higher with a 90 cent rally midday while traders have struggled
to gain additional market volume in order to solidify higher price
levels through the end of the week. Limited volume is likely early next
week with end-of-month positioning likely to develop Monday and Tuesday.
LEAN HOGS:
A weak undertone remains well rooted in lean hog
trade despite the initial bounce higher Friday morning. Nearby
contracts are trading steady to $1 per cwt lower as concerns of
longer-term trade volume to China may add even more pressure on the
entire hog complex. There are still expectations that pork demand will
improve and that China will be a major player in the next year. But
given the lack of sales last week, the reality that China being a
constant and consistent player in the pork market quickly hit home. It
is uncertain just how much weekly or monthly sales traders will consider
"enough" to stabilize the market over the coming weeks. But it is very
clear that market participants will not look fondly on a week with no
sales. Cash prices are lower on the National Direct morning cash hog
report. The weighted average price fell $1.79 per cwt at $79.16 per cwt
with the range from $72.00 to $84.00, on 3,886 head reported sold. Cash
prices are lower on the Iowa/Minnesota Direct morning cash hog report.
The weighted average price fell $3.46 per cwt at $78.82 per cwt with the
range from $74.00 to $84.00, on 571 head reported sold. Pork values
firmed Friday in active trade despite wide shifts in primal cuts. Pork
cutouts added $1.57 per cwt at $85.29 per cwt with 217 loads traded.
Lean hog index for 4/24 is $83.40 up 0.61, with a projected two-day
index is $83.73 up 0.33.
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