Friday Closing Livestock Market Summary - Feeder Prices Respond to Cheaper Corn

GENERAL COMMENTS: From Friday to Friday, livestock futures scored the following changes: June live cattle up $3.95, August live cattle up $2.13, August feeder cattle up $3.17, September feeder cattle up $2.65, July lean hogs off $4.15, August lean hogs off $1.90. Amid a fairly quiet end-of-week, cash cattle business ranged from steady to $2 lower than last week. According the closing report, the national hog base is $0.80 lower ($61.00 to $70.00, weighted average $69.06). Corn futures closed sharply lower amid surprising acreage figures from USDA, but soybeans and soybean meal moved higher Friday. The stock market closed higher, up 17 points Friday in the S&P 500 and netting only slight losses for the week.

LIVE CATTLE: A light-to-moderate trade developed over the noon hour in parts of the North, with dressed business ranging from $178 to $180, steady to $2 lower than last week's weighted average, basis Nebraska. These negotiations were likely for cattle to be delivered in the second week of July. In the futures market, the August live cattle contract traded nearly the exact same range as last week -- mostly between $102 and $106.35, which may give some credence to the theory that the losses of the past two months may be starting to bottom out. Beef cut-outs were mixed Friday, seen at $219.66 choice (up $0.63) and $195.56 select (down $1.34).

MONDAY'S CASH CATTLE CALL: Steady. Monday's activity will be limited to the collection of new showlists. We look for the offering to be steady around $109 live/$180 dressed.

FEEDER CATTLE: The most notable livestock futures trading activity Friday occurred in the August feeder cattle contract, which at one point was up more than $4, ultimately closing the day up $1.05. The sudden feeder cattle bullishness was related to USDA's bearish corn assumptions about several million acres that may or may not have been planted. New-crop corn futures were at one point Friday down 25 cents and ultimately closed down 19 1/2 cents. As second thoughts carried through all the related markets, cattle traders tempered their reactions. CME cash feeder index for 6/27/19: $132.61, up $0.74.

LEAN HOGS: Lean hog futures prices continue to exhibit roughly seasonal behavior, remaining $20 to $30 above the February and March doldrums. However, after this week's Hogs and Pigs report re-emphasized the massively efficient and ever-growing U.S. herd (now pegged at 103.6% of its year-ago size), a continued futures slide on Friday was no surprise. Carcass value closed lower Friday in a continuation of a weeks-long trend. Pork cut-out: $73.84, down $0.35. CME cash lean index for 06/26: $77.26, down $0.65 (DTN Projected lean index for 06/27: $76.05, down $1.21).

MONDAY'S CASH HOG CALL: Steady to $1 lower. Hog buyers are expected to resume work Monday with decaying bids to reflect the bearish supply scenario.

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Friday Midday Livestock Market Summary - Livestock Futures React to USDA Reports

General Comments

LIVE CATTLE:

Cash cattle is pushing the limits again with trading confined mainly to Friday. Lower boxed beef prices this week have not provided the incentive for buyers to become aggressive. June goes of the board today and is showing triple-digit gains. It has been gaining every day this week as price converges to underlying cash. This cannot be said for the rest of the complex as prices are mixed. Boxed beef cut-outs are mixed at midday with choice cuts up $0.89 per cwt at $219.92 with select cuts down $0.83 per cwt at $196.07. Total load count is moderate at 76 reported (39 loads of choice cuts, 27 loads of select cuts, no loads of trimmings, and 10 loads of ground beef.

FEEDER CATTLE:

Feeder cattle futures have done an about face at mid-morning with contracts flipping from slightly negative to surge to triple-digit gains with August leading the charge posting over a $3.00 gain. This gain correlates with the release of the grain acreage report, which showed corn acres being increasing to more than last year. Cheaper corn could spur more interest in feeder cattle.

LEAN HOGS:

July lean hogs are down $0.65 while later contracts post triple-digit gains. Spread trading is taking place as a reaction to the bearish implications of the Hogs and Pigs report released yesterday. Buyers stepped into the market after futures held trend line support. The National Daily Direct morning cash report has the weighted average price $0.98 lower at $68.00 with a range of $61.00 to $70.00. The National Pork Plant report posted 193 loads sold. Pork carcass values declined $0.72 per cwt at a price of $72.17 per cwt. The lean hog index for 6/26 is $77.26, down $0.65 with a projected two-day index of $7605, down $1.21.

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Friday Morning Livestock Market Summary - Weak Hog Futures Expected Following Hogs and Pigs Report

GENERAL COMMENTS: 

Cash cattle trade is rolling into Friday after a lack of trade in most areas this week and limited interest by packers to this point. Even though light-to-moderate trade will develop sometime Friday, it appears that both sides are in no hurry or have no urgency to trade cattle this week. Bids are quiet, but the wide gap between bids and asking prices this week is not expected to change Friday morning, and will likely limit the overall movement of cash trade unless there are major changes during the day. Futures trade is expected to be mixed with end-of-the-month and quarter positioning being one of the main factors. This may add increased underlying support as the general market tone has firmed during the week. Front-month feeder cattle futures have rallied over $4 per cwt off of weekly and contract lows, allowing for potential support to redevelop during early July. Although beef market fundamentals remain generally weak leading into the month of July and Fourth of July holiday, the technical support in the complex is helping to regain underlying market stability.

Moderate early pressure is expected in nearby lean hog futures Friday morning as traders adjust to the gains in hog inventory levels after Thursday's report. Sharp triple-digit gains swiftly moved through the complex Thursday afternoon, with increased interest in potential overall pork movement and the expectation traders will continue to bounce off long-term lows during late June and early July. But a 4% increase in hog numbers as of June 1 is expected to curb optimism during the last day of June. Although the growth of hog inventory is not unexpected, the fact that the recent price pressure has not only limited current hog numbers, but farrowing expectations at this point are likely viewed bearish. Traders still focus on the significant need to feed the world with pork due to African swine fever causing significant production losses in China and other Asian countries. But the current trade issues with China remain the main roadblock in moving aggressive amounts of pork into this region over the near future. Cash trade is called steady to $2 lower Friday morning with most bids $1 lower. Expected slaughter Friday is at 471,000 head. Saturday runs are expected at 57,000 head.

	BULL SIDE		BEAR SIDE
1)	Strong midweek support in feeder and live cattle trade has sparked increased support through the complex. This may add increased underlying support at the end of the week, potentially moving through initial resistance levels at the end of the month.	1)	Beef values continue to erode through late June creating concern that overall pressure may continue to develop through beef market fundamentals, limiting overall support in futures trade during early July.
2)	Cattle feeders continue to aggressively hold their ground when it comes to cash cattle trade for the week. The lethargic interest and reduced bids by packers so far this week has not eroded resolve as asking prices remain firm from early-week levels. It appears that feedlot managers will be willing to carry inventory into early July rather than bow to lower bids at the end of the week.	2)	Sluggish trade Thursday seemed more focused on end-of-the-month adjustments following aggressive gains early in the week. The inability for traders to hold weekly gains could lead to firm weakness in the near future.
3)	Sharp gains flooded lean hog futures trade Thursday as traders continue to push prices off of long-term lows through the end of the month. Focus on long-term pork demand is expected to stimulate additional underlying support in the upcoming weeks.	3)	Hog inventory levels increased 4% from year-ago levels on June 1, as reported in Thursday's Hogs and Pigs report. This increased supply level in the nations hog herd is expected to add pressure to the complex, which is unable to gain ready access to the Chinese pork market due to the ongoing trade war.
4)	Trade talks at the end of the week with China continue to give a glimmer of hope when it comes to hog trade and increased access to the Chinese pork market. Just the idea of talking once again is a positive move that has been lacking over the last several weeks.	4)	Despite strong support Thursday, lean hog futures remain near long-term lows, with price only $3 per cwt above August 2018 support levels. The potential concern that additional long-term weakness will develop during early July based on growing pork supplies could limit commercial trader activity.

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Thursday Closing Livestock Market Summary - Hog Futures Rally

GENERAL COMMENTS: Limited movement seen in cattle futures left traders subdued following the aggressive moves higher at midweek. Hog futures attracted most of the attention Thursday with triple-digit gains. Increased hog inventory in the quarterly hogs and pigs report may curb current support through the end of the month as traders assess current inventory levels and farrowing intentions. Corn futures ended lower Thursday in limited trade. July futures is 3 1/4 cents per bushel lower. Dow Jones Index is 10 points lower with Nasdaq up 57 points.

CASH MARKETS: Cash cattle markets are quiet with a few token bids reported in Nebraska at $107 to $108 live and $175 to $176 dressed. Through the week, dressed bids have improved slightly, but the amount of bids seen in all areas indicate a lack of interest for packers to gain access to cattle. Asking prices are stable with earlier levels mostly at $111 to $112 live and $182 dressed. National Daily Direct afternoon hog report is $1.56 lower with a weighted average of $69.14 per cwt. Full range of $62 to $71.00 per cwt on 7,034 head sold.

LIVE CATTLE: Limited pressure developed through the complex, following feeder cattle prices lower ($0.45 lower to $1.57 higher). June futures, which are nearing expiration, rallied higher, closing up $1.57 per cwt as traders tried to adjust positions before the end of the month. The rest of the complex closed lower after remaining stuck in a narrow sideways pattern through the session. A lack of volume kept many traders on the sidelines following strong support Wednesday. With August futures testing short-term resistance levels of $105.55 per cwt, buyers took a breather following the rally Wednesday. Given the renewed technical reversal seen in live cattle trade during late June, follow-through support could move back into the complex in the first two weeks of July. A move above $105.55 and $106.82, respectively, would solidify a bullish market move in live cattle trade. Given the current supply of cattle and sluggish beef movement, it is likely that prices will continue to establish a longer-term sideways range between $102 and $106 per cwt through most of the summer.Beef cut-outs: lower, $1.66 lower (select, $196.90) and up $0.67 (choice, $219.03) with light demand and offerings, 133 loads (61 loads of choice cuts, 42 loads of select cuts, six loads of trimmings, 24 loads of coarse grinds).

FRIDAY'S CASH CATTLE CALL: Steady. Limited interest has developed through the week, leaving any needed trade for Friday. Bids are expected to redevelop in some areas Friday morning, but it is uncertain how active packers will be to secure trade before the end of the month.

FEEDER CATTLE: Late day pressure pushed feeder cattle prices lower ($0.02 to $0.75 lower). Mixed trade Thursday took the emphasis off midweek gains and the ability to push prices away from contract lows at the end of the week. Limited activity is seen through the complex, allowing prices to soften at the closing bell, but holding onto the majority of Wednesday's rally. Trades are caught between soft market fundamentals and renewed technical support. This may add increased volatility Friday, allowing for wide market swings with traders closing out the month of June. CME cash feeder index for 6/26 is $131.87, up $0.36.

LEAN HOGS: Active gains swept though hog futures as traders focus on continued support ($0.27 to $2.12 higher). Moderate to strong gains have developed through all lean hog trade as traders adjusted positions ahead of the quarterly hogs and pigs report released Thursday afternoon. Technical support developed in all nearby contracts with October and December futures posting gains over $2 per cwt. Quarterly hogs and pigs reports posted a 4% increase in inventory over year ago levels. Even though inventory levels only increased 1% from first quarter levels, the increased supply levels is likely to put additional pressure on the market through the end of the week. Pork values firmed following wide price swings in primal cuts. Pork cutout values added $0.22 per cwt, moving to $74.19 per cwt on 340 loads. CME cash lean index for 6/25 is $77.91, down $0.40. DTN Projected lean index for 6/26 is $77.26, down $0.35.

FRIDAY'S CASH HOG CALL: Steady to $1 lower. Firm pressure is expected to continue through the end of the week, despite strong support in futures trade Thursday. Packers continue to gain access to market ready hogs through the summer, allowing for choppy but weak cash market prices. Most bids are expected to be 50 cents to $1 lower. Friday slaughter numbers are expected at 471,000 head. Saturday runs are expected near 57,000 head.

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Thursday Midday Livestock Market Summary - Limited Activity Puts Pressure on Cattle Futures

General Comments

Cattle futures remain sluggish Thursday as limited interest has redeveloped following Wednesday's market rally. The potential for underlying support to trickle into the complex through the end of the session is likely to add to the growing support in cattle futures. Hog futures remain firmly higher despite limited volume. Corn futures are lower in light trade. July corn futures are 4 cents lower. Stock markets are higher in light trade. Dow Jones is 31 points higher with NASDAQ up 51 points.

LIVE CATTLE:

Mixed trade is holding Thursday morning with most contracts hovering in a narrowly mixed range. Lightly traded June futures are posting triple-digit gains, but light open interest in June trade is keeping these market swings irrelevant with most active trade in August and October contracts, each holding 35 cent gains. The ability to spark additional underlying support through the end of the session could bring additional interest back to the Friday. Cash cattle activity remains at a standstill Thursday morning which is likely to push any active trade off until Friday. Bids are undeveloped Thursday morning in the South, while a few bids have redeveloped in the North at $107 to $108 live and $175 to $176 dressed. Asking prices are well above these levels, and given the stability of futures trade Thursday, feeders are not likely to be interested in prices near current bids. Boxed Beef cut-outs at midday are lower, $0.26 lower (select) and down $0.08 per cwt (choice) with moderate movement of 56 total loads reported (26 loads of choice cuts, 14 loads of select cuts, 6 loads of trimmings, 10 loads of ground beef).

FEEDER CATTLE:

Mixed trade is holding across feeder cattle trade with august futures maintaining narrow gains, while the rest of the complex is eroding slightly. Most of the pressure seen Thursday morning is traders taking advantage of light volume and squaring positions following the rally Wednesday. At this point, it appears there will be no attempt or desire to reach expanded trading limits with most contracts hovering from 30 cents lower to 30 cents higher. Limited direction at the end of the month will help confirm recent support, but may limit renewed interest during early July.

LEAN HOGS:

Firm underlying buyer support has moved back into lean hog trade with buyers pushing prices $1 to $2.30 per cwt higher Thursday. Although there continues to be fundamental market pressure across the entire lean hog complex, end-of-month buying is moving into the complex. The quarterly hogs and pigs report will be released Thursday afternoon. Although the report is not expected to create a significant market shift, traders are adjusting positions ahead of the report with expectations that long-term hog supplies will be reduced due to the pressure in the market and recent sharp gains in feed prices. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $1.59 at $69.11 per cwt with the range from $62 to $71 on 3,036 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork values bounced higher on firm belly market gains. Pork cutouts added $1.38 per cwt at $75.35 per cwt with 153 loads traded. Lean hog index for 6/25 is $77.91, down 0.40, with a projected two-day index is $77.26, down 0.65.

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Thursday Morning Livestock Market Summary - Follow-Through Cattle Gains Expected

GENERAL COMMENTS: 

Cash cattle activity is expected to remain sluggish Thursday morning following limited interest earlier in the week. Although a few cattle have been sold in the North on a dressed basis at $180 per cwt late Wednesday, the market is still undefined. It is uncertain just how many cattle will need to be purchased this week due to the upcoming holiday weekend and cattle already committed for later delivery in early July. Initial token bids in the first half of the week were around $107 live and $175 dressed and are expected to be floated once again by packers, but unlikely to get any attention as asking prices are much higher in all areas. Asking prices are expected to remain at $112 to $114 per cwt live basis and $180 to $183 dressed basis, with some firmness possible in asking prices if futures trade continues to show support. The aggressive turn around in cattle futures Wednesday sparked limit gains in front-month feeder cattle futures. This will allow for expanded trading limits Thursday in all feeder cattle trade. The daily limit will move to $6.75 per cwt, allowing for increased potential market swings. Although it is premature to assume that strong follow-through support will continue to shift market trends higher, the move away from contract lows will not be lost on traders. Firm follow-through support is expected in all cattle trade Thursday morning, although initial support is likely to be curbed by moderate position-taking during early trade before active volume enters the complex. Beef values remain sluggish, although the shift higher in futures trade and expected firm holiday demand should help to improve overall movement in choice and select cuts.

Mixed trade is expected in lean hog trade early Thursday morning following moderate price shifts through the week. The lack of active support midweek is creating additional uncertainty about end-of-the-month support in the next two trading sessions. Nearby contracts have continued to hover near long-term lows, but limited direction is likely if prices are able to hold in the current range, just above support levels set earlier in the week. Concerns about short- and long-term export pork demand as well as building domestic demand has continued to spark some uncertainty, which will lead to expected mixed trade Thursday and likely into the end of the month. Cash trade is called steady to $1 lower Thursday morning with most bids steady to weak. Expected slaughter Thursday is at 477,000 head. Saturday runs are expected at 57,000 head.

	BULL SIDE		BEAR SIDE
1)	Limit gains in feeder cattle trade midweek is sparking renewed technical support, allowing for increased market shifts as traders move back into the complex following setting contract lows in early-week trade.	1)	Limited interest in cash cattle trade is likely to create underlying concerns of limited movement through the end of the month. With the upcoming holiday weekend limiting processing activity, cash movement may be sluggish the next couple of weeks.
2)	Following strong midweek gains in live cattle futures, August futures are testing short-term resistance levels set in the middle of June. If prices move above $105.55 per cwt in August futures Thursday, renewed support is likely through the end of the week.	2)	Sharp market gains Wednesday may create increased volatility, leading to moderate-to-wide market swings through the end of the month. This could limit long-term support.
3)	Continued active commitments over the last several weeks by noncommercial trades holding long positions continues to focus on underlying long-term support holding through the complex.	3)	Pork cutout values continue to weaken during late June. The most notable pressure is developing in rib cuts, which is traditionally the key focus of summer pork demand. Rib cuts fell $18.35 per cwt Wednesday afternoon.
4)	Even with current uncertainty in trade conditions, hog futures are expected to see limited pressure over the near future due to markets already remaining oversold following the aggressive market slide over the last two months. This could spark renewed support at or near $75 per cwt in August contract months during early July..	4)	Limited follow-through interest in futures trade midweek is creating uncertainty about the ability for continued steady price support to develop at the end of the month. This may spark sharp market swings through the entire complex, leading to additional late-week liquidation.

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Wednesday Closing Livestock Market Summary - Live Cattle Futures Follow Feeder Cattle Prices Higher

GENERAL COMMENTS: Buyers flooded into the cattle trade Wednesday, pushing futures higher. Feeder cattle futures led the complex higher with the August contract closing limit up. Hog futures remained mixed in limited trade. Cash cattle interest was at a standstill Wednesday with a few bids still seen from the morning at $107 live and $174 to $175 dressed basis. Packers may purchase fewer cattle next week due to the holiday on Thursday. That being said, at least light trade is expected in all areas over the next two days, although shifts in market direction are not likely. The National Daily Direct afternoon hog report is $1.39 lower than the prior day settlement ($62-$74.50, weighted average $70.68) on 8,441 head sold. Corn futures ended lower Wednesday in limited trade with July down 4 1/4 cents. The Dow Jones Index was 11 points lower with the NASDAQ up 25 points.

LIVE CATTLE: Live cattle futures followed feeder cattle higher with all contract months posting triple-digit gains. The full range of closes was $1.15 to $2.12 higher. The August futures contract led the complex higher, gaining $2.12 per cwt to close at $105.37 per cwt. This rally continues to move prices away from last week's lows, potentially establishing a seasonal market low as traders look for firming holiday demand and potential late-year support through the beef complex. Beef cut-outs: mixed, off $0.39 (select, $198.56) to up $0.06 (choice, $219.70) with light demand and offerings (71 loads of choice cuts, 41 loads of select cuts, 7 loads of trimmings, 37 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL: Steady. Trade has remained quiet through the first half of the week. Direction is expected to be limited early Thursday morning, but packers are expected to become slightly more aggressive as the day continues. It is uncertain just how many cattle will be bought through the end of the week with the end of month and quarter limiting interest, in addition to the upcoming holiday-shortened week ahead.

FEEDER CATTLE: Feeder cattle futures closed limit higher Wednesday (up $4.02 to $4.50). Spot August led the market higher with a $4.50-per-cwt rally. All contract months saw gains of over $4 per cwt. With prices bouncing off contract lows, the concern is that this may be an end-of-the-month correction and futures may not be able to hold onto support over the long term. But current demand for beef and expected long-term supplies of feeder cattle are expected to limit the downside potential, despite higher grain and feed prices. CME cash feeder index for 6/25 is $131.46, up $0.05.

LEAN HOGS: Lean hog futures closed mixed ($0.85 lower to $0.17 higher) in limited trade. Firm pressure developed late in the session with July and August futures leading the market lower, down 70 to 85 cents. The pressure was mainly due to traders rolling out of nearby contracts, but weak fundamentals -- including strong production and the ongoing trade war with China -- also make potential gains through the end of the month uncertain. Pork values tumbled following an $18.35-per-cwt loss in rib cuts. Pork cutout values fell $1.61 per cwt, moving to $73.97 per cwt on 282 loads. CME cash lean index for 6/24 is $78.31, down $0.34. DTN Projected lean index for 6/25 is $77.91, down $0.40.

THURSDAY'S CASH HOG CALL: Steady to $2 lower. Despite moderate-to-strong buyer support midweek in hog futures, packers continue to focus on eroding margins and lackluster pork values through the end of June. This is expected to limit spending over the next couple of days, although reduced cash values is not expected to limit procurement levels at this point due to the amount of market-ready hogs available at the end of the month. Most bids are expected steady to weak Thursday morning. Thursday slaughter numbers are expected at 477,000 head. Saturday runs are expected near 57,000 head.

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Wednesday Midday Livestock Market Summary - Support Floods Cattle Complex

General Comments

Buyers quickly moved back into the cattle complex with feeder cattle trade leading the surge higher. August futures are locked in limit gains of $4.50 per cwt, helping to stimulate support through the rest of the cattle complex. Hog markets are mixed in a narrow range as traders try to sort out longer-term direction later in the week. Corn futures are lower in light trade. July corn futures are 2 1/4 cents lower. Stock markets are higher in light trade. Dow Jones is 41 points higher with NASDAQ up 45 points.

LIVE CATTLE:

Limited initial gains at opening bell have quickly expanded following aggressive buyer interest moving into feeder cattle trade. This has allowed for triple-digit gains in all live cattle trade with August futures leading the surge higher, on a $2.12-per-cwt rally. This underlying support in the complex is taking advantage of the severely oversold market status, which until now, limited a critical mass of buyers willing to step into the complex. The move not only pushed prices off contract lows, but sparked a technical reversal in the complex, allowing for potential upside movement through the end of the month. Although overall beef market fundamentals remain shaky through early summer, the focus on sparking long-term support is likely to bring about renewed interest over the next couple of weeks. Cash cattle interest remains sluggish with a few bids redeveloping Wednesday morning in the same range as Tuesday. Bids are seen at $107 live and $174 to $175 dressed. Given the wide gap between bids and asking prices, and strong futures support, it is unlikely that packers will gain any interest at these levels. Asking prices are holding at $110 and higher live and $$180 to $182 dressed. Although some trade may develop by the end of the day, most activity is likely to be pushed into Thursday or Friday. Boxed Beef cut-outs at midday are higher, $0.21 higher (select) and up $0.59 per cwt (choice) with moderate movement of 86 total loads reported (36 loads of choice cuts, 18 loads of select cuts, 4 loads of trimmings, 27 loads of ground beef).

FEEDER CATTLE:

Buying interest quickly developed Wednesday morning as traders focus on a technical reversal seen in cattle markets with prices bouncing off contract lows following recent market pressure. Although the light pressure in corn trade is limiting production concerns, traders are focused on the intensely oversold cattle complex, and potential for unrestricted buying that may develop over the near future. August futures have spent much of the morning limit higher with $4.50 per cwt gains, while other nearby contracts are holding gains above $4 per cwt.

LEAN HOGS:

Limited activity is seen in hog trade Wednesday morning with trade interest quickly shifting to aggressive gains in cattle markets. Lean hog futures remain mixed in a narrow to moderate trading range, although most contracts are able to etch out firmer price levels midday Wednesday. Lightly traded July futures remain under limited pressure, falling 40 cents per cwt, while all other nearby contracts are hanging onto 10 to 50 cent gains, although volume remains sluggish across the complex. If current gains hold, this will go a long way in stimulating additional but more stable buyer support late in the week as traders focus on bouncing off of long term lows set Monday. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $1.76 at $70.31 per cwt with the range from $62 to $71.50 on 3,736 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork values continue to show weakness following a $10.26 per cwt loss in rib prices. Pork cutouts fell $0.95 per cwt at $74.63 per cwt with 143 loads traded. Lean hog index for 6/24 is $78.31, down 0.34, with a projected two-day index is $77.91, down 0.40.

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Wednesday Morning Livestock Market Summary - Traders Focus on Rebuilding Support Levels

GENERAL COMMENTS: 

Cash cattle interest has been limited the last couple of days, which is expected to keep both sides sluggish early Wednesday morning. Packers are expected to bid similar to Tuesday around $107 live and $174 to $175 dressed basis. Asking prices are likely to become more evident as the day develops, although it is uncertain just how much trade will develop Wednesday. Given the trend for midweek trade in the South over the last couple of months, it is likely that there could be a push to trade at least some cattle by the end of the day, but the softness of the cattle market will likely keep packers from aggressively pushing bids higher in the next few days. With the upcoming holiday week, it is also uncertain just how many negotiated cattle are needed to fill procurement schedules. This could limit cash market support through the end of the week. Futures trade is expected to remain mixed in a moderate trading range. With strong gains Tuesday pushing prices off of contract lows, the focus now moves to follow-through buying and rebuilding underlying market support at these price levels. Weakness in feeder cattle trade will continue to limit the upside potential of the entire cattle complex in the next couple of weeks.

The strong market bounce Tuesday in lean hog trade helped to bring a sense of stability to the market, although traders remain cautious as the structure of the complex remains weak. Even though nearby futures rallied nearly $2 per cwt Tuesday, the fact that prices tumbled nearly $9 per cwt over the previous three trading sessions should not be overlooked. Follow-through buyer support will need to develop over the next couple of trading sessions in order for traders to take this market shift seriously and move it out of the "market correction" category. There will be a lot of emphasis on the initial moves Wednesday morning, which will likely direct the tone of the market through the rest of the month. Cash trade is called steady to $2 lower Tuesday morning with most bids $1 lower. Expected slaughter Tuesday is at 476,000 head.

	BULL SIDE		BEAR SIDE
1)	Strong gains in live cattle Tuesday is helping to rekindle buyer support at new support levels of $103 per cwt in August futures. This could bring about follow-through gains through the end of the month.	1)	Continued early-week pressure in boxed beef cutout values Tuesday is limiting expectations of firming end of the month and pre-holiday beef demand growth. The inability to spark additional gains in wholesale beef values may limit continued support in futures trade this week.
2)	Beef demand is expected to remain strong through the upcoming holiday, which should bring additional support to wholesale beef values through the end of June.	2)	Feeder cattle futures continue to weaken, moving to new contract lows Tuesday while buyer interest developed in all other contract months. This may spark additional underlying pressure through Wednesday morning.
3)	Sharp gains have redeveloped in lean hog futures trade Tuesday, creating expectations of follow-through support Wednesday morning. This is expected to spark renewed underlying support levels following the market pressure.	3)	Sharp losses continue to develop in pork cutout values with traditional summer cuts like ribs and bacon showing firm pressure. Further erosion of these price levels will limit future price support in hog complex.
4)	A glimmer of hope continues to hold ahead of trade talks expected this week in Japan between U.S. and China. Although few expect any quick resolution at this point, the redeveloping of talks is viewed as a step in the right direction.	4)	Despite strong futures gains Tuesday, the structure of the hog market remains weak. Price levels continue to hover just above long-term support levels. This is leaving the entire complex in a vulnerable position as end of the month pressure could spark aggressive long-term pressure.

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Tuesday Closing Livestock Market Summary - Buying Redevelops Across Livestock Trade

GENERAL COMMENTS: Livestock futures moved mostly higher Tuesday with lean hogs up by triple digits. Initial gains appeared to be due to traders covering short positions, and then increasing buyer support throughout the session helped to solidify those early gains. Cash cattle activity remained sluggish Tuesday afternoon with a few token bids of $107 live basis and $174 to $175 dressed. Although asking prices are not readily available, a few cattle have been priced in the South at $110 to $111 live basis. It is expected to be Wednesday or later before cash trade develops. Even when it does develop, activity could trickle in over a couple of days at the end of the week. Given that next week is the first week of July, and a holiday week to boot, it is uncertain just how many cattle will be purchased before the end of June. The National Daily Direct afternoon hog report was $1.33 lower ($62-$76.50, weighted average $72.18) on 9,751 head sold. Corn futures ended mixed Tuesday following early gains with July up 3/4 cent per bushel. The Dow Jones Index was 179 points lower with the NASDAQ down 120 points.

LIVE CATTLE: Live cattle futures settled $0.10 to $0.82 higher. A lack of pressure throughout the livestock trade helped to rekindle buyer support in nearby futures with June through October futures each posting 82-cent gains at closing bell. Live cattle futures spent most of the session trading mixed in a narrow range, but stronger support moved into the complex in the last hour of trade, pushing nearby futures higher. Though futures remain at the bottom end of trading ranges, the potential to establish new support levels during the last week in June could spark renewed commercial interest during the next few weeks. Beef cut-outs: lower, down $0.86 (select, $198.95) to down $0.10 (choice, $219.64) with moderate to good demand and moderate offerings, 151 loads (77 loads of choice cuts, 46 loads of select cuts, 8 loads of trimmings, 20 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL: Steady. Limited bids and asking prices are available going into midweek, which may keep both sides from aggressively focusing on sales until later in the week. Packer interest is expected to improve as the day continues, but significant focus will be placed on the overall direction of futures trade.

FEEDER CATTLE: Feeder cattle futures closed $0.07 to $0.47 lower. Futures traded mixed in a narrow-to-moderate range throughout Tuesday's session. Firming support in live cattle trade and late-day pressure in corn markets was not enough to boost feeder cattle futures. Nearby contracts remain under firm pressure with 45- to 47-cent losses. Limited volume late in the day kept most traders on the sidelines as they watch for potential support in cattle trade through the end of the month. Nearby feeder cattle contracts have set new contract lows, with traders still unsuccessfully searching for market support. CME cash feeder index for 6/24 is $131.46, up $0.05.

LEAN HOGS: Lean hog futures closed $0.50 to $1.95 higher. Active buying quickly moved into lean hog futures Tuesday morning, bringing an abrupt halt to the August futures' nearly $9-per-cwt slide over three trading sessions. But given the technical pressure already in the complex, gains of nearly $2 per cwt do very little to replace buying interest. At this point, the bounce higher is viewed more as a correction than a reversal. But continued support at midweek could lead to additional buying at the end of the month. Although there continues to be optimism for trade talks with China later in the week, expectations of any significant developments in the near term are relatively low at this point. Pork prices tumbled as sharp losses in bellies offset gains in rib cuts. Pork cutout values fell $1.75 per cwt, moving to $75.58 per cwt on 357 loads. CME cash lean index for 6/21 is $78.65, down $0.49. DTN Projected lean index for 6/24 is $78.31, down $0.34.

WEDNESDAY'S CASH HOG CALL: Steady to $2 lower. Continued weakness is expected through lean hog trade with bids expected to be mostly $1 per cwt lower early Wednesday morning. Despite the support in futures trade Tuesday, packers remain concerned about fundamental pressure through the end of the month. Wednesday slaughter numbers are expected at 477,000 head. Saturday runs are expected near 57,000 head.

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Tuesday Midday Livestock Market Summary - Hog Markets Rally

General Comments

Active buyer support moved into lean hog futures trade with triple-digit support holding at midday. Although prices have backed away from session highs in cattle and hog futures, traders are trying to rebuild market support at current price levels. Corn futures are higher in light trade. July corn futures are 2 3/4 cents higher. Stock markets are lower in light trade. Dow Jones is 48 points lower with NASDAQ down 52 points.

LIVE CATTLE:

Mixed trade is seen at midday following a failed attempt to spark strong renewed buyer support through the entire live cattle complex. June futures are leading the complex higher with a 37 cnet per cwt rally as traders continue to quickly exit June contracts as markets are nearing expiration. The rest of the complex is stuck in a narrowly mixed range of 10 cents lower to 5 cents higher as traders appear to be treading water at current price levels, given the extreme market pressure seen in all livestock trade over the last week. Cash cattle activity remains generally sluggish with a few bids developing through the morning. Live bids are seen at $107 per cwt, with dressed bids in the North at $174 to $175 per cwt. Asking prices are still undefined, and may remain that way through the end of the day. Trade is likely to be pushed to the last half of the week, although the potential for limited live trade in the South midweek could still be seen. Boxed Beef cut-outs at midday are lower, $0.52 lower (select) and down $0.36 per cwt (choice) with moderate movement of 95 total loads reported (55 loads of choice cuts, 24 loads of select cuts, 7 loads of trimmings, 9 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have bounced higher and lower in a narrow to moderate range Tuesday. The initial move higher focused on firming support in live cattle trade as well as short covering. But buyer interest seemed to quickly run out of steam, leaving prices to erode late morning, setting additional contact lows at midday. It is expected that trade volume will remain light through the end of the session, leaving prices hovering in light to moderate losses near closing bell.

LEAN HOGS:

Following two days of aggressive losses, buyers stepped back into the complex, pushing prices higher Tuesday morning. Firm support has held through the morning, although midday prices have backed away from session highs due to general lack of market buyer support willing to move into the still weak market structure. Traders are cautiously focusing on the market rally Tuesday, making sure that there is longer term substance behind the move higher, and not just a one day rally based on short covering. Continued technical pressure still exists, while fundamentals have yet to show signs of support during late June. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $1.59 at $71.92 per cwt with the range from $63 to $75 on 5,276 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork values shifted lower once again as pork values continue to bounce higher and lower on a daily basis. Pork cutouts fell $0.50 per cwt at $76.83 per cwt with 212 loads traded. Lean hog index for 6/21 is $78.65, down 0.49, with a projected two-day index is $78.31, down 0.34.

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Tuesday Morning Livestock Market Summary - Continued Liquidation Expected

GENERAL COMMENTS: 

Limited cash cattle activity is expected on Tuesday with the early-week market pressure limiting overall packer interest during the morning. With showlists generally smaller, it is likely that packers will become more aggressive in searching for market-ready cattle earlier in the week, but the underlying pressure in the market may cause significantly lower initial bids. At this point, it is uncertain how feedlot managers will react this early in the week. They might hold out for potential market support later in the week, and higher prices, or they could cut their losses if pressure continues to develop through the end of the week, taking advantage of what basis opportunities they currently have. This could keep cash market activity variable the next few days, but currently bids and asking prices are not yet well defined. Futures trade is expected to remain generally weak. The ability to hold narrow gains in nearby live cattle trade Monday despite the sharp feeder cattle trade, is putting more focus on commercial support trickling back into the complex this week. With nearby contracts at or near contract lows, the concern of follow-through pressure remains evident for the near future.

Continued active liquidation Monday sparked increased pressure across the hog complex as traders continue to extend market losses, breaking through support levels and trading at 2019 lows. August lean hog futures have moved to the lowest market price since August 2018, creating additional long-term pressure in the complex. With traders focusing on current production levels that are not expected to change in the short term, as well as struggling export demand, continued pressure is possible in the near future. Although trade talks with China are taking place ahead of the G-20 summit in Japan this week, traders appear to have little hope that anything significant will come out of this round of talks, and overall export sales to China are likely to remain subdued through the foreseeable future. Cash trade is called steady to $2 lower Tuesday morning with most bids $1 lower. Expected slaughter Tuesday is at 476,000 head.

	BULL SIDE		BEAR SIDE
1)	Limited buying in nearby live cattle trade will provide potential market stability through the end of the month. This may stimulate additional underlying support through the next couple of trading sessions.	1)	Feeder cattle futures continue to post sharp losses during early-week trade. This has moved nearby contracts to contract lows, sparking renewed concern of follow-through liquidation through the end of the month.
2)	Given current beef demand expectations and the overall firmness of domestic support through the end of the year, beef values have the potential to firm up ahead of the Fourth of July holiday.	2)	Lack of support in wholesale beef values, combined with moderate-to-sharp cash cattle pressure last week is adding increased weakness to market fundamentals while technical pressure is redeveloping in live cattle trade.
3)	Lean hog futures remain oversold, creating the opportunity for renewed commercial support to move back into the complex through the end of the month.	3)	Lean hog futures have posted triple-digit losses at or over $3 per cwt, in the last two trading sessions. This aggressive pressure broke through spring support levels, and moved prices to August 2018 lows. The potential for follow-through liquidation is increasing through the week.
4)	Noncommercial traders continue to hold a strong long position in lean hog futures, at this point unwilling to liquidate, and ride out the current market shift lower. This is expected to stimulate underlying market support as this position continues.	4)	Firm pressure is developing in cash hog business as packers focus on the lack of support in futures trade, unwilling to continue the current spending pattern in the eroding market structure.

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Monday Closing Livestock Market Summary - Limit Hog Closes Spark Technical Pressure

GENERAL COMMENTS: Sharp losses flooded feeder cattle and lean hog trade Monday as follow through liquidation developed in both markets. The stability in live cattle trade could help bring increased support to the complex through the end of the month. Corn futures rallied Monday. July futures is 4 3/4 cents per bushel lower. Dow Jones Index is 34 points lower with NASDAQ down 19 points.

CASH MARKETS: Cash cattle interest remains quiet with bids and asking prices undeveloped Monday. Show lists remain generally lower in most areas, which may help to stimulate packer interest earlier than later this week. Most trade is likely to hold out until midweek or later. National Daily Direct afternoon hog report is $0.34 lower with a weighted average of $73.51 per cwt. Full range of $64 to $75 per cwt on 10,963 head sold.

LIVE CATTLE: Mixed trade held as buyers trickle into summer contracts ($0.30 lower to $0.37 higher). Limited activity was seen through the complex even though sharp losses developed through the rest of the market. Traders focused on short covering opportunities as the potential for end of the month support in beef prices could help bring additional buyers back into the bearish market structure.Beef cut-outs: mixed, $0.26 higher (select, $199.81) and down $0.08 (choice, $219.74) with light demand and moderate offerings, 120 loads (67 loads of choice cuts, 22 loads of select cuts, 17 loads of trimmings, 14 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL: Steady. Limited direction is expected early in the week following showlist distribution and inventory-taking on Monday. Most trade is expected to hold off until midweek or later, which may keep packers limited in offering bids over the next couple of days.

FEEDER CATTLE: Continued pressure was seen as grain markets move higher ($1.70 to $2.45 lower). Even though support in the grain complex was limited Monday, the underlying pressure already in feeder cattle trade sparked long-term liquidation. Triple-digit losses brought increased technical selling to the complex, even though limited fundamental market changes were seen early in the week. Increased underlying weakness remains in feeder cattle trade, as traders search for renewed support. CME cash feeder index for 6/20 is $131.37, down $1.62.

LEAN HOGS: Sharp additional losses pressure long-term support levels ($1.85 to $3.67 lower). Traders took advantage of expanded trading limits Monday. Losses over the last two sessions broke through March lows in August contracts, allowing for active liquidation to develop over the near future. Pork prices firm following wide price shifts in primal cuts. Pork cutout values added $0.60 per cwt, moving to $77.33 per cwt on 282 loads. CME cash lean index for 6/19 is $79.55, up $0.06. DTN Projected lean index for 6/20 is $79.14, down $0.41.

TUESDAY'S CASH HOG CALL: Steady to $2 lower. Strong underlying pressure is expected to continue to develop in cash hog trade. This may spark underlying weakness through the market, although active processing schedules are likely to continue through the end of the month. Tuesday slaughter numbers are expected at 477,000 head.

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