Active pressure quickly moved through livestock futures Tuesday morning, taking away any sense of market support following the holiday weekend. Storms and rain through many areas of the country over the weekend added further concern of building demand, and the potential to move active mean supplies through the consumer markets. Corn futures are higher in moderate trade. July corn futures are 12 cents higher. Stock markets are higher in light trade. Dow Jones is 31 points higher with NASDAQ up 34 points.
LIVE CATTLE:
Live cattle futures remain mixed following moderate to wide shifts through the morning. Initial gains were unable to hold through midmorning as traders continue to focus on active pressure in hog and feeder cattle trade. But as limited volume is seen in the live cattle complex, traders seem to be focusing more on the potential for moderate to strong demand support through the upcoming weeks. Cash cattle markets are quiet early in the week with bids and asking prices still undeveloped. This could easily push trade to the last half of the week due to the late holiday driven start. Boxed Beef cut-outs at midday are higher, $2.36 higher (select) and up $1.43 per cwt (choice) with light movement of 36 total loads reported (19 loads of choice cuts, 12 loads of select cuts, no loads of trimmings, 6 loads of ground beef).
FEEDER CATTLE:
Active pressure through the morning has created additional softness through the entire complex. There is increased trade volume moving into feeder cattle futures, but prices have backed away from morning lows following renewed stability in live cattle trade. This may help to spark late week stability in the feeder cattle market, although traders still remain extremely cautious given the overall growth in feeder cattle supplies and expected meat supplies through the end of the year. Strong double-digit gains in corn trade is also creating uncertainty through the entire complex and bringing active seller interest back to the table.
LEAN HOGS:
Expanded trading limits have quickly come into play Tuesday morning with nearby contracts holding losses of $3 to $3.20 per cwt at midday. Following limit losses late last week, limits are set at $4.50 per cwt, creating additional room for traders to push prices lower through the session. Underlying weakness has continued to develop over the last week despite a rally cry from many industry leaders that global pork demand will continue to develop even if trade deals with China are unavailable. The concern over the weekend that a trade deal with China, at least over the short term, is less and less likely is causing many traders to lose hope that U.S. pork will find its way back into the Chinese market. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $1.09 at $76.88 per cwt with the range from $72.00 to $77.50 on 4,862 head reported sold. Cash prices unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork values quickly firmed following steady early week buying. Pork cutouts added $1.28 per cwt at $84.55 per cwt with 118 loads traded. Lean hog index for 5/23 is $84.02, down 0.34, with a projected two-day index at $83.31, down 0.71.
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