Sharp limit gains have flooded back into lean hog futures as traders focus on the ability to spark increased underlying support following the recent price liquidation. There continues to be increased underlying support despite the previous pressure. Cattle futures are mixed to mostly higher following buyers stepping back into feeder cattle trade. Corn futures are higher in light trade. July corn futures are 3/4 cent higher. Stock markets are higher in light trade. Dow Jones is 50 points higher with Nasdaq up 41 points.
LIVE CATTLE:
Mixed trade is seen through most of the complex with traders looking for support from gains in feeder cattle futures as well as increased volume seen through early May. The focus on rebuilding buyer interest over the next few days could help to set short- and long-term support levels. Traders remain focused on the potential for increased beef demand to develop over the coming weeks, although boxed beef values and cash markets may continue to shift in a mixed but wide range over the next couple of week. Limited interest is seen in cash markets Wednesday morning with live bids seen at $123 with dressed bids of $200. Current asking prices remain at $125 to $126 live and $204 and higher dressed. Some limited trade may develop in the South through the end of the day, but most likely the majority of remaining trade is likely to hold out until Thursday or Friday. Boxed Beef cut-outs at midday are mixed, $0.45 higher (select) and down $0.58 per cwt (choice) with active movement of 99 total loads reported (59 loads of choice cuts, 13 loads of select cuts, 8 loads of trimmings, 19 loads of ground beef).
FEEDER CATTLE:
Moderate to active buying returned to feeder cattle trade Wednesday morning following aggressive liquidation over the last week. The market remains extremely oversold, which is helping to spark additional underlying buyer activity move back into the complex. Consistent gains of 80 to 90 cents per cwt are seen through the complex, which may allow additional late day buying interest to move back into the complex. The move above $150 per cwt in August futures is likely to bring about increased longer-term trade support based on expected beef demand through the rest of the year.
LEAN HOGS:
Lean hog futures have surged higher through late morning following the inability for additional active selling to take hold in deferred contacts. June through October contracts remain locked in limit gains of $3 per cwt on the first trading day of May. This optimism is seen following abbreviated trade talks in China, on which both sides report to have made progress. This sets up the next round of talks in Washington DC next week as encouragement, which is seen as moving the process along, even though it is a slow process. With all of the uncertainty still hovering over the pork complex, the lack of follow-through liquidation is quickly filling the vacuum of the oversold market status. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.83 per cwt at $78.62 per cwt with the range from $72.00 to $83.00, on 4,809 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $1.96 per cwt at $79.85 per cwt with the range from $73.00 to $83.00, on 1,195 head reported sold. Pork values rebounded slightly following an attempt to stabilize primal cuts during early May. Pork cutouts added $0.47 per cwt at $82.69 per cwt with 178 loads traded. Lean hog index for 4/29 is $83.27 down 0.19, with a projected two-day index is unreported at this time.
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