Early-market support flooded into livestock trade with triple-digit morning gains developing in cattle and hog futures. The initial support has eased through the cattle complex based on sharp gains in grain trade, despite hog futures holding strong market support. Corn futures are higher in active trade. July corn futures are 11 3/4 cents higher. Stock markets are higher in light trade. Dow Jones is 281 points higher with Nasdaq up 100 points.
LIVE CATTLE:
Live cattle futures remain mixed at midday as traders continue to pull back from initial buyer support seen at midday. The overall pressure developing Monday is expected to have been driven by overall outside market pressure and active market liquidation through the entire complex. But traders seem to have very limited interest in stepping into a still weak market structure with narrow 10 cent losses seen in deferred contracts. The overall lack of follow through support in feeder cattle trade and surge in grain prices is having an dramatic impact in the entire cattle market. Trade is expected to remain sluggish through the last hour of trade, although lack of buyer activity may weaken the entire complex later in the week. Cash cattle interest is still quiet with just a few token bids at $116 per cwt seen in Kansas. Asking prices are still hard to pinpoint in all areas, but expected to remain around $125 live and $200 or higher dressed. It is uncertain that cash trade will develop Tuesday due to the market volatility in futures trade. But increased interest should develop over the next two days. Boxed Beef cut-outs at midday are mixed, $0.66 higher (select) and down $0.54 per cwt (choice) with light movement of 74 total loads reported (43 loads of choice cuts, 14 loads of select cuts, 8 loads of trimmings, 9 loads of ground beef).
FEEDER CATTLE:
Although feeder cattle futures remain in a positive trading range Tuesday morning, the inability for traders to hold onto early gains with August through November futures holding 12 to 40 cent gains at midday, is creating additional market concerns. The underlying pressure in feeder cattle trade Monday was expected to have quickly been offset by buying moving into the market like most other markets. But double-digit gains in grain trade is quickly creating additional bearish market trends in all cattle trade, although feeder cattle prices appear to be most impacted by the higher production costs.
LEAN HOGS:
Active triple-digit gains have continued to hold through the entire complex with June and July futures holding $3 to $3.40 per cwt following the market reversal seen through the complex. This is moving June futures back to $90 per cwt and quickly helping to establish support levels at recent levels of $86.67 per cwt. Although no new market information has developed over the last 24 hours which would turn the market around this quickly, the expectation that widespread market pressure in nearly all trade was overstated, as traders try to take a more logical approach to market moves as the week continues. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.16 per cwt at $80.72 per cwt with the range from $72.00 to $83.00, on 3,815 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $0.24 per cwt at $82.66 per cwt with the range from $81.00 to $83.00, on 2,205 head reported sold. Pork values inched higher following wide swings in primal cuts Tuesday morning. Pork cutouts added $0.40 per cwt at $88.64 per cwt with 175 loads traded. Lean hog index for 5/10 is $83.04 up 0.24, with a projected two-day index $83.27 up 0.23.
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