Strong underlying support has redeveloped through the live cattle and feeder cattle complex with end-of-week support moving into the complex. Limited volume is seen, which will create uncertainty about the ability to sustain follow through gains early next week. Hog futures are hovering in a narrowly mixed trade range through the morning, as traders cover positions late Friday. Corn futures are higher in active trade. July corn futures are 3 1/2 cents higher. Stock markets are lower in light trade. Dow Jones is 12 points lower with Nasdaq down 30 points.
LIVE CATTLE:
Live cattle futures have bounced off early pressure as prices are mixed within a narrow range. Traders are moving away from strong pressure in feeder cattle with the focus moving more toward moderate to strong upcoming demand. The fact that hog futures have bounced back from sharp losses early in the session has helped bring spillover buying back to the live cattle trade. Even though prices are not expected to show significant support over the near future, the ability to remain steady to higher will be a significant moral victory to the complex. Cash cattle trade appears to be finished through the South, although some additional live and dressed trade may develop in the North. It is likely that price levels have already been set by the amount of trade seen over the last two days. Dressed trade developed at $184 to $186, mostly $185 per cwt, $7 per cwt lower than last week. Live trade was seen mostly $117, $3 per cwt lower than last week. A few dressed bids are seen in Nebraska at $186 per cwt, which may spark limited end of the week trade. Boxed Beef cut-outs at midday are unreported due to delayed reporting.
FEEDER CATTLE:
Strong follow-through buyer support is quickly and aggressively moving into the oversold cattle complex as traders continue to move prices off of long-term contract lows. Even though corn prices have continued to move higher, traders are focusing on current feeder cattle market support levels as $142.25 per cwt in August contacts as potential long-term support levels due to still strong demand expectations. Triple-digit gains are seen in all but lightly traded May contracts, allowing for increased overall buyer momentum to develop through the entire complex.
LEAN HOGS:
Lack of trade volume in the complex has continued to spark additional market softness Friday morning with traders slowly covering gains earlier in the week. Mixed trade within a narrow range that was seen through most of the morning has now shifted lower with prices steady to 60 cents lower. Most contracts are holding losses of 20 to 30 cents per cwt. The recent gains have sparked moderate to solid buyer support through the entire complex, allowing for expectations of follow-through support in the coming days. Even though the trade war with China continues to heighten, the focus on supplying pork to global markets will continue to underpin world and domestic price levels. Cash prices are unavailable due to report delays. Pork values inched higher as rib cuts slowly regained a portion of Thursday's losses. Pork cutouts added $0.14 per cwt at $86.27 per cwt with 108 loads traded. Lean hog index for 5/15 is $84.20 up 0.53, with a projected two-day index is unreported due to report delays.
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