Sluggish early trade has quickly turned to
active price support in cattle trade. This is helping to solidify buying
interest in feeder cattle and live cattle trade as traders cover short
positions seen during the week. Hog markets remain mixed with trade war
concerns still limiting additional buyer interest. Corn futures are
lower in light trade. July corn futures are 3 cents lower. Stock markets
are lower in light trade. Dow Jones is 165 points lower with Nasdaq
down 77 points.
LIVE CATTLE:
Live cattle futures have gained underlying
support late in the week with most contracts holding firm gains based on
additional underlying support in feeder cattle trade. Front-month June
futures are stable at $111.95 per cwt while other nearby contracts have
moved back above $108 per cwt through midday trade. The potential to
bring additional buying back to the table following recent market
liquidation is expected to help solidify price levels, although markets
are not expected to move back to previous highs due to the volatility
and global economic uncertainty in the complex. Cash cattle activity
appears to be wrapped up for the week with live trade in the South at
$120 per cwt, $2 to $3 per cwt lower than last week. Northern Dressed
trade was seen in a wide range of $185 to $196 per cwt, The weighted
average is nearly $6 per cwt lower than last week. Boxed Beef cut-outs
at midday are mixed, $0.76 higher (select) and down $1.53 per cwt
(choice) with moderate movement of 74 total loads reported (32 loads of
choice cuts, 19 loads of select cuts, 9 loads of trimmings, 14 loads of
ground beef).
FEEDER CATTLE:
Strong buyer support has moved into feeder
cattle late Friday morning with traders focusing on end-of-week
positioning as the strong weakness and emotional selling has eroded
through the complex. Deferred trade is showing the most aggressive
support through the complex with increased direction focusing on the
ability to move late 2019 and 2020 contracts to triple-digit gains. The
market remains extremely oversold, with recent selling creating a vacuum
that traders are willing to step back into given the expectation that
live cattle trade may stabilize through the next couple of weeks.
LEAN HOGS:
Lean hog futures continue to bounce higher and
lower through the morning with the latest pressure focusing on
short-term contract months with June futures leading the mixed trade
lower. With concerns that a trade deal with China may not develop
anytime soon, spot-month contracts are holding losses near $1 per cwt.
The overall pressure in the complex is limited to nearby trade as light
to moderate gains are seen in deferred trade with the focus on still
bullish demand expectations to meet world demand. The threat to pork
production continues to be real in most Asian countries, and beyond the
focus of China. This may limit additional pressure in 2020 contracts.
Cash prices are lower on the National Direct morning cash hog report.
The weighted average price fell $0.05 per cwt at $80.47 per cwt with the
range from $75.00 to $83.00, on 8,140 head reported sold. Cash prices
are higher on the Iowa/Minnesota Direct morning cash hog report. The
weighted average price added $0.18 per cwt at $82.88 per cwt with the
range from $81.00 to $83.00, on 4,620 head reported sold. Pork values
eroded through the endof the week with aggressive losses in rib and ham
cuts. Pork cutouts fell $0.99 per cwt at $85.83 per cwt with 176 loads
traded. Lean hog index for 5/8 is $82.76 up 0.08, with a projected
two-day index $82.80 up 0.04.
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