GENERAL COMMENTS: Hog futures surged higher early Tuesday morning, but the bearish tone of livestock markets caused prices to erode. The most aggressive pressure developed in deferred contracts as traders focused on uncertain demand. Cattle futures shifted lower, following triple-digit losses in feeder cattle futures. Limited cash market interest developed Tuesday with cattle remaining untraded. A few token bids wandered through the market Tuesday afternoon at $122 to $123 per cwt live basis through the South. Asking prices in the South are starting at $126 and higher. No interest has developed at this point in the North, although this is not unusual for this time of the week. Some business may develop Wednesday, but most activity is likely to be pushed to the last couple days of the week. The National Daily Direct afternoon hog report was $0.67 higher ($71-$83.25, weighted average $80.46) on 9,465 head sold. Corn futures were higher in light trade with July up 3/4 cent per bushel. The Dow Jones Index was 8 points higher with the Nasdaq down 63 points.
LIVE CATTLE: Live cattle futures followed feeder cattle futures lower in light trade Tuesday. Futures settled $0.55 to $1.02 lower. Moderate to strong losses swept through live cattle futures near closing bell, following what appeared to be sluggish and generally stable trade most of the day. Triple-digit losses in feeder cattle affected live cattle trade at the end of April, creating additional pressure. The focus on recent market pressure and the inability of -- or lack of desire by -- noncommercial traders to step back into the complex could open the door for additional softness in early May. Beef cut-outs: mixed, $0.49 higher (select, $218.21) and down $1.30 (choice, $231.84) with moderate demand and moderate to heavy offerings, 123 loads (58 loads of choice cuts, 32 loads of select cuts, 17 load of trimmings, 17 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL: Bids and asking prices are expected to redevelop where they left off Tuesday with little interest likely early in the day. Southern trade has developed midweek in previous weeks, creating an expectation that some business may get done before the day Wednesday.
FEEDER CATTLE: Continued technical weakness pushed feeder cattle futures $1.62 to $1.95 lower. Triple-digit losses quickly moved into feeder cattle futures with May setting a contract low and August falling below $150 per cwt for the first time since early February. This abrupt turnaround in feeder cattle trade has pushed the June futures contract over $10 per cwt lower in less than two weeks. The emotional response in the complex is creating an oversold market status, but at this point, momentum to liquidate remains so great that it is going to be hard for buyers to step back into the complex. CME cash feeder index for 4/29 is $144.66, down $0.33.
LEAN HOGS: Strong late-day pressure eroded initial buyer interest. Futures closed mixed, $1.55 lower to $0.17 higher. Despite active buyer activity early Tuesday morning, traders quickly moved away from session highs as the day continued. Previous market optimism is being limited by the uncertainty surrounding a China trade deal and the prospects for continued U.S. pork exports to China through the spring and summer. The June futures contract eked out a 17-cent gain, while all other contracts closed lower. The most aggressive pressure developed in the fourth quarter of the year with triple-digit losses sweeping through October and December contracts. Continued strong production through the summer may limit upward support through the complex over the near future. Pork cutouts posted sharp losses at the end of the month following weakness in most all primal cuts. Pork cutout values fell $2.77 per cwt, moving to $82.22 per cwt on 358 loads. CME cash lean index for 4/26 is $83.46, down $0.27. DTN Projected lean index for 4/29 $83.27, down $0.19.
WEDNESDAY'S CASH HOG CALL: Steady to $1 lower. Packers are expected to increase lower bids Wednesday morning despite strong procurement expectations through the rest of the week. There is an attempt to pull back off weekend processing schedules, and with early month interest, packers may be able to keep most bids steady to weak. Wednesday slaughter is expected at 474,000 head. Saturday runs are shaping up near 36,000 head.
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