GENERAL COMMENTS: Uncertainty over U.S.-China trade talks and announcements by both sides about plans for new tariffs have led to widespread shifts in livestock futures over the last two days. Hog futures posted triple-digit gains Tuesday as traders backed away from previous losses. Cattle futures firmed early in the session, but were unable to hold onto gains. Cash cattle interest remained generally undeveloped Tuesday afternoon with just a few scattered asking prices seen in Texas at $120 per cwt. These are likely to hold despite the wide shifts in futures. Limited packer interest is seen in Kansas with bids at $116 per cwt Tuesday, although trade may still develop in the next couple of days. Southern trade has wrapped up midweek over the last several months, so some additional interest may be seen Wednesday. The National Daily Direct afternoon hog report was $1.14 higher ($72-$84, weighted average $82.02) on 15,430 head sold. Corn futures posted strong gains in active trade with July up 12 1/4 cents. The Dow Jones Index was 300 points higher with the Nasdaq up 116 points.
LIVE CATTLE: Early support in live cattle futures eroded, leading to narrow losses of $0.20 to $0.80. Strong support in most commodity and financial markets did very little to spark activity in cattle markets Tuesday. Light volume as well as gains in grain and feed markets led to uncertainty in the complex. Beef cut-outs: mixed, up $0.08 (select, $208.97) to down $1.46 (choice, $220.12) with good demand and moderate offerings, 126 loads (69 loads of choice cuts, 33 loads of select cuts, 9 load of trimmings, 15 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL: Steady. Limited interest is seen through cash cattle markets, creating the potential for midweek trade to develop. If trade were to develop, it would likely be through the South, with Northern activity seen later in the week.
FEEDER CATTLE: Feeder cattle futures broke away from outside market support to close mostly lower Tuesday. Futures settled $1.15 lower to $0.95 higher. Buyer support flooded into the feeder cattle complex Tuesday morning as traders focused on the strength in most other markets. But that early support faded due, in part, to double-digit gains in grain prices. Higher grain prices will raise production costs and lower prices paid for feeder cattle moving into feed yards. The August futures contract moved in a wide ($3.15 per cwt) trading range through the day. CME cash feeder index for 5/13 is $125.07, down $0.32.
LEAN HOGS: Lean hog futures rebounded Tuesday with several nearby contracts holding above $3 per cwt through much of the session. Overall, futures closed $0.30 lower to $2.45 higher. Even though prices backed off their session highs Tuesday afternoon, the renewed interest in a weak pork complex helped to cause many traders to breathe a little easier. June through October futures posted triple-digit gains at closing bell, gaining back a significant portion of early week losses. But the tone of the market still remains weak as traders contend that increased volatility surrounding trade with China will keep markets bouncing higher and lower with little indication or significant reason. Pork cutouts continued to see light-to-moderate support Tuesday following mixed primal values in a wide market range. Pork cutout values added $0.40 per cwt, moving to $88.64 per cwt on 325 loads. CME cash lean index for 5/10 is $83.04, up $0.24. DTN Projected lean index for 5/13 is $83.27, up $0.23.
WEDNESDAY'S CASH HOG CALL: $1 lower to $1 higher. Wide swings in futures and pork cutout trade over the last few days are likely to keep cash markets mixed through midweek. Initial bids are expected to be mostly steady as packers continue to gain access to market ready hogs, but still have started easing procurement levels in order to limit additional spending due to less-than-desirable packer margins.
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