Strong underlying pressure is redeveloping in feeder cattle futures. This is causing additional weakness through live cattle trade midday. Hog futures remain firmly higher with triple-digit gains holding in nearby contract months. Corn futures are lower in light trade. July corn futures are 3/4 cent lower. Stock markets are lower in light trade. Dow Jones is 205 points lower with Nasdaq down 50 points.
LIVE CATTLE:
Light to moderate pressure is holding in live cattle trade following mixed market direction through Thursday morning. The most active pressure is seen in late 2019 and early 2020 contract months based on strong underlying pressure in feeder cattle markets. The inability to sustain early buying activity in both live cattle and feeder cattle trade is causing growing concerns that liquidation may continue to trickle through the complex over the near future. Cash cattle activity remains sluggish Thursday morning following light to moderate trade through most areas. A few bids are developing in Colorado at $124 per cwt, although tone of the market seems to be set with live cattle at $122 to $124 per cwt, with most sales at $123 per cwt. Dressed cattle sold at $198 to $200 per cwt. Most of the cash business is expected to be wrapped up, although some cleanup activity may develop over the next couple of days. Boxed Beef cut-outs at midday are lower, $1.17 lower (select) and down $1.25 per cwt (choice) with moderate movement of 79 total loads reported (29 loads of choice cuts, 15 loads of select cuts, 9 loads of trimmings, 26 loads of ground beef).
FEEDER CATTLE:
Strong triple-digit losses have redeveloped through feeder cattle trade as May futures are extending technical losses with prices falling $1.75 per cwt at midday. The underlying pressure and push below $140 per cwt has added to the already bearish structure through the entire complex. Additional longer term softness is developing through the entire market with nearby trade now at the lowest prices since March 2018 on the continuous chart. Fundamentally, the cattle complex has changed very little, leaving the recent market shifts adding to the emotional swings of the complex.
LEAN HOGS:
Follow-through buyer support is seen through nearby lean hog futures with June futures leading the complex higher with a $1.57 per cwt rally late morning. Contracts have eroded at midday from session highs of $2 per cwt as limited buyer support is seen through the complex. Firm follow-through buying after limit gains Wednesday is being challenged by lack of fundamental and export support. No additional sales to China were reported in the morning export sales report, which is generally bearish to the market. But with prices so oversold through the last half of April, sellers are unwilling to actively move back into the complex at this point. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.85 per cwt at $79.63 per cwt with the range from $77.50 to $83.00, on 3,455 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork values quickly surged higher following recent futures support and strong gains in most wholesale cuts. Pork cutouts added $1.51 per cwt at $83.50 per cwt with 111 loads traded. Lean hog index for 4/30 is $83.33 up 0.06, with a projected two-day index $83.23 down 0.10.
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