Strong early support in live cattle and feeder
cattle markets have backed away with increased trade interest holding
through the complex. Corn futures are lower in moderate trade. July corn
futures are 3 cents lower. Stock markets are lower in light trade. Dow
Jones is 96 points lower with Nasdaq down 33 points.
LIVE CATTLE:
Light buying continues at midday in nearby
contracts following strong underlying support from the cold storage
report, and export sales report which posted increased exports for the
week. Traders are looking for increased short- and long-term demand,
even though the upcoming cattle on feed report may post record numbers
of cattle on feedyards. This may bring some additional volatility
through the complex going into the long holiday weekend as well as next
week. Cash cattle interest is sluggish Thursday morning with light to
moderate live cattle sales seen in the north at $116 per cwt. This is $1
per cwt lower than last week's live prices in the North. Bids are seen
in all other areas in the same range as Wednesday. Boxed Beef cut-outs
at midday are higher, $0.86 higher (select) and up $0.76 per cwt
(choice) with light movement of 73 total loads reported (37 loads of
choice cuts, 14 loads of select cuts, 4 loads of trimmings, 18 loads of
ground beef).
FEEDER CATTLE:
Initial gains in feeder cattle trade have slowly
eroded through the morning with traders holding a mixed trading range
from 20 cents lower to 15 cents higher. Strong export sales gains for
beef has sparked additional support through the complex with May and
August futures holding a 10 to 15 cent gain as very limited movement is
seen in live cattle trade. The underlying concern surrounding aggressive
cattle on feed report expectations which will continue to limit market
support over the next couple of weeks.
LEAN HOGS:
Lean hog futures are mixed in limited activity
with June futures holding a narrow 5 cent loss, while other 2019
contracts are holding gains of 10 to 30 cents per cwt. The focus on a
strong export sale to China in the mornings export sales report has
offset early sharp losses in the market as traders back away from the
concern of eroding demand and move more to the short term potential for
growth in the complex. Limited pressure is still seen in deferred
contracts, although limited movement is expected through the end of the
session based on current price levels, and recent market pressure
limiting overall long term support through the complex. Cash prices are
higher on the National Direct morning cash hog report. The weighted
average price is up $1.11 at $80.33 per cwt with the range from $72.00
to $83.00 on 7,761 head reported sold. Cash prices are higher on the
Iowa/Minnesota Direct morning cash hog report. The weighted average
price is up $1.75 at $81.26 per cwt with the range from $78.00 to $83.00
on 5,341 head reported sold. Pork values firmed Thursday with mixed
triple-digit ranges seen in the complex. Pork cutouts added $0.28 per
cwt at $85.11 per cwt with 149 loads traded. Lean hog index for 5/21 is
$84.39, up 0.02, with a projected two-day index at $84.36, down 0.03.
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