Narrow moves in live cattle trade is limiting volume through the entire complex. This may add increased uncertainty through the market during early June. Hog futures remain focused on increasingly bearish market direction. Corn futures are lower in moderate trade. July corn futures are 4 1/4 cents lower. Stock markets are lower in light trade. Dow Jones is 249 points lower with NASDAQ down 82 points.
LIVE CATTLE:
Light gains have slowly developed in live cattle trade late Friday as traders try to adjust following the tumble lower over the past couple of days. August futures are barely holding above long term support levels as prices have tested contract lows through the morning. Limited activity is seen through the complex, which is likely to keep prices in a narrowly mixed range through the end of the session. Cash cattle is quiet following moderate activity over the last couple of days. Most trade needed for the week is done, although there could be a few clean up deals before the end of the day, but prices are expected to have been set. Boxed Beef cut-outs at midday are mixed, $0.66 lower (select) and up $0.24 per cwt (choice) with light movement of 89 total loads reported (40 loads of choice cuts, 16 loads of select cuts, 3 loads of trimmings, 30 loads of ground beef).
FEEDER CATTLE:
Strong follow-through losses have quickly developed through feeder cattle trade despite the pullback in corn markets. The strong surge higher in grain prices through the week is driven by uncertainty and confusion on the amount of corn available through the end of the year. This may spark some additional underlying weakness through all cattle trade, which is driven by feeder cattle trade.
LEAN HOGS:
Moderate to firm pressure continues to develop through lean hog trade Friday morning with increased concerns that additional pressure may develop through early June. June futures continue to lead markets lower, but the inability to draw any late month support to the complex may add increased volatility to the entire market. Strong export sales to China were not enough to bring buying interest back to the complex. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $1.07 at $75.33 per cwt with the range from $71.00 to $77.00 on 3,116 head reported sold. Cash prices unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork values bounced higher Friday due to mixed primal trade. Pork cutouts added $1.21 per cwt at $83.06 per cwt with 147 loads traded. Lean hog index for 5/28 is $82.56, down 0.75, with a projected two-day index at $82.22, down 0.34.
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