GENERAL COMMENTS: Early pressure Wednesday seemed to rekindle active liquidation through the first couple of hours of trade. Buyers quickly moved into the oversold market, sparking active support in cattle and hog futures. Nearby lean hog futures surged to triple-digit gains, quickly bouncing off of short-term lows, creating longer-term hope of follow-through support at the end of the week. Corn futures slipped lower in light trade. July futures fell 1 1/2 cent per bushel. Dow Jones Index is 221 points lower with NASDAQ down 60 points. Limited cash cattle trade developed Wednesday afternoon at $115 per cwt in Texas and Kansas. Although additional trade is expected, this may set a steady tone for the week. Bids in the North are $116 live and $185 dressed, which may limit overall activity until later in the week. Asking prices remain at $117 to $118 live and $188 and higher dressed. National Daily Direct afternoon hog report is $0.51 lower with a weighted average of $76.35 per cwt. Full range of $71.00 to $78.00 per cwt on 10,231 head sold.
LIVE CATTLE: Live cattle futures turned higher late Wednesday ($0.07 to $0.80 higher). Light-to-moderate support developed Wednesday afternoon following a market reversal in feeder cattle futures and continued support based on morning cutout gains. June futures led the complex higher with an 80-cent rally with traders slowly backing away from market pressure. The inability for corn markets to continue the sharp market rally of the last two weeks brought the focus back to underlying seasonal demand for beef, and less emphasis on increasing production costs. August through December contracts posted limited gains with traders trying to rebuild market stability through the end of the week while remaining optimistic about long-term buyer support trickling into the complex through the month of June. Beef cut-outs: mixed, $0.46 lower (select, $209.99) and up $0.24 (choice, $223.53) with good demand and light to moderate offerings, 143 loads (71 loads of choice cuts, 45 loads of select cuts, 9 loads of trimmings, 18 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL: Steady. Light trade developed in the South Wednesday at $115 per cwt. The ability to bring deals to the table early in a post-holiday week may stimulate additional market direction Thursday. At this point, packers and feeders appear focused on steady money heading into month end. Trade may not finish, especially in the North, until sometime Friday.
FEEDER CATTLE: Feeder cattle futures broke away from active liquidation (0.25 lower to $0.50 higher) following a lower close in corn futures. Narrow losses in corn futures quickly pulled nearby feeder cattle futures away from setting new contract lows Wednesday. Nearby futures have posted narrow gains, steady to 50 cents higher, as traders have been encouraged by the pullback from early morning gains in corn prices. Although extremely strong support remains in grain markets surrounding planting concerns, the temporary reprieve seems to be sparking some underlying support through nearby feeder cattle. All feeder cattle futures remain stuck in a narrow trading range, eliminating any significant premium in the complex. This is based on aggressive placement and supply numbers expected through the next several months as well as growing concern surrounding feed prices. CME cash feeder index for 5/27 is $136.65, up 0.10.
LEAN HOGS: Strong buyer support moved into hog trade late Wednesday with triple-digit gains developing ($0.35 to $2.10 higher). Strong buyer support quickly moved into the oversold lean hog complex with triple-digit gains in all nearby contracts as previous selling lost momentum. After traders posted a $8 per cwt market retraction over the last two weeks, price levels rebounded at midday following June contracts holding support at $84 per cwt. Limited fundamental developments are seen through the complex, allowing active gains to swiftly move through the contracts. This could help redevelop additional technical support, although uncertainty remains surrounding any development with a China trade deal and growing demand surrounding African swine fever. Pork cutouts posted sharp losses following aggressive double-digit losses in rib and belly cuts. Pork cutout values fell $1.48 per cwt, moving to $84.48 per cwt on 356 loads. CME cash lean index for 5/24 is $83.31, down 0.71. DTN Projected lean index for 5/28 is $82.56, down 0.75.
THURSDAY'S CASH HOG CALL: Steady to $2 lower. Continued pressure is expected through the cash hog market with traders focusing on the recent market slide and attemps by packers to improve margins. Most bids are expected to be steady to 50 cents lower. Thursday's slaughter is expected at 475,000 head. Saturday runs are expected at 231,000 head.
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