Active pressure continues to flood into lean hog futures, pushing prices at or near limit losses through late morning. There continues to be concerns that follow-through weakness will develop as emotional buyer support starts to erode. Cattle markets are mixed in a narrow range with traders treading water with prices on either side of unchanged. Corn futures are higher in light trade. May corn futures are 3/4 cent higher. Stock markets are lower in light trade. Dow Jones is 139 points lower with Nasdaq down 11 points.
LIVE CATTLE:
Sluggish market trade is seen through all cattle markets Tuesday morning as traders seem more focused on wide market losses in lean hog trade and stock market prices. Nearby contracts are holding single-digit prices on either side of unchanged with prices hovering from 5 cents lower to 5 cents higher. There is very little new market information in the beef industry to spark trader activity at this point. Even though beef demand is expected to continue to firm through the next couple of months, this has already been factored into price levels. Markets are expected to remain sluggish through the end of the session, although deferred futures may see additional price shifts due to limited trade volume. Cash cattle interest is slowly developing with a few asking prices seen at $124 to $125 through the South. Bids are not fully established, but a few starter bids are starting to slowly trickle into the complex with prices at $124 live and $203 dressed. Given midweek trade seen the last two weeks, there could be some sales over the next couple of days. But most trade is likely to be pushed to the last half of the week. Boxed Beef cut-outs at midday are mixed, $0.91 lower (select) and up $0.30 per cwt (choice) with light movement of 68 total loads reported (36 loads of choice cuts, 12 loads of select cuts, 4 loads of trimmings, 15 loads of ground beef).
FEEDER CATTLE:
Narrow losses continue to hold in feeder cattle trade as limited interest is seen in all cattle markets Tuesday morning. The overall lack of market activity is allowing traders to slowly find a market groove following sharp gains last week. Even though renewed buyer support has moved back into the complex, there seems to be little additional direction through the complex which could allow for prices to hover in a narrow trading range over the near future.
LEAN HOGS:
Sharp losses have quickly moved through lean hog futures as traders continue to liquidate positions following Monday shift lower. Spot April contracts continue to hold 25 cent gains, although traders continue to be driven by aggressive selling in all other contracts. May futures, despite remaining extremely lightly traded, are holding limit losses. This pressure is sparking additional softness through the complex with summer and fall contracts $2 to $2.60 per cwt lower. The emotional nature of recent market moves makes this price shift unsettling. This has the potential to spark continued losses through the week with little to no technical or fundamental market shifts. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.38 at $75.01 per cwt with the range from $67.50 to $78.00, on 7,485 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $1.28 at $75.07 per cwt with the range from $68.00 to $78.00, on 4,155 head reported sold. Pork values slipped slightly following mixed primal values. Pork cutouts fell $0.06 per cwt at $83.23 per cwt with 216 loads traded. Lean hog index for 4/5 is $78.68 up 0.15, with a projected two-day index is $78.89 up $0.21.
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