GENERAL COMMENTS: Cattle futures quickly surged higher Tuesday as support developed in feeder cattle futures, then quickly moved to live cattle. Triple-digit gains sparked added interest as traders quickly moved back into the complex following the aggressive liquidation over the past month. Hog futures struggled early to find support, but prices moved higher late in the day. Light cash cattle trade continued to be seen Tuesday with prices steady to $1 per lower than Monday's trade at $112 to $113 per cwt. This is generally $2 per cwt lower than last week with most Southern sales at $113 per cwt. Live trade in the North is seen at $114 per cwt, still $2 per cwt lower than last week. Dressed trade is expected to develop later in the week with early bids of $183 per cwt seen in most areas. Asking prices remain at $118 live and $188 dressed. The National Daily Direct afternoon hog report was $0.13 lower ($68-$78, weighted average $75.98) on 10,159 head sold. Corn futures firmed in light trade with July up 1 cent per bushel. The Dow Jones Index was 512 points higher with the Nasdaq up 194 points.
LIVE CATTLE: Live cattle futures saw firm gains following the strength in feeder cattle trade Tuesday. Live cattle futures closed $0.77 to $1.70 higher. Buyers quickly stepped into the cattle market, helping support nearby contracts and moving prices off of contract lows. The August futures contract rose to $104.05 per cwt, easing the threat of the contract breaking through long-term support. Although a one-day move in the market is not enough to change the market tone, traders seem to be willing to break away from the market pressure seen over the last month. News reports of BSE in Brazil seemed to add to the momentum shift. However, at this point, it is anyone's guess as to what -- if any --domestic or global impact this will have on beef prices. Beef cut-outs: mixed, up $0.34 (select, $207.21) to down $0.20 (choice, $223.00) with good demand and moderate offerings, 140 loads (55 loads of choice cuts, 53 loads of select cuts, 12 loads of trimmings, 21 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL: $2 lower than last week. Trade is expected to continue to develop midweek following light-to-moderate activity Monday and Tuesday. The limited trade seen early in the week is expected to spark additional interest over the next couple of days, but the tone appears to be set.
FEEDER CATTLE: Feeder cattle futures posted triple-digit gains of $3.25 to $3.95. The extremely oversold cattle complex sparked renewed buyer support Tuesday, which seemed to suspend concerns about rising feed costs. The August futures contract led the complex higher, rallying $3.95 per cwt. But traders are looking for additional buying to develop through the rest of the week in order to confirm a market turnaround and not just an attempt to cover short positions at low prices. A report of BSE in Brazil has created some emotional support in the cattle complex, as it could spark some renewed U.S. export demand in the coming months. CME cash feeder index for 6/3 is $131.95, down $1.10.
LEAN HOGS: Moderate support moved back into the lean hog trade following support through the rest of the livestock complex. Futures closed mixed, $0.45 lower to $1.85 higher. Nearby lean hog futures regained buyer support as commercial traders slowly stepped back into the market. Narrowly mixed trade was seen through most of the session with very little direction developing until near closing bell. The July contract set the tone, moving $1.27 per cwt higher as uncertainty over global trade and worldwide pork demand is hard to pin down. China will continue to need more pork. But with the escalating trade war, whether China will buy that pork from the U.S. seems to be a bigger issue than prices at this point. Firm losses developed as primals shifted in a widely mixed range Tuesday. Pork cutout values fell $1.26 per cwt, moving to $83.65 per cwt, on 431 loads. CME cash lean index for 5/31 is $81.28, down $0.64. DTN Projected lean index for 6/3 is $80.90, down $0.38.
WEDNESDAY'S CASH HOG CALL: Steady to $1 lower. As packers focus on stabilizing procurement levels and hog supplies, bids have remained firm through the week. Most bids are expected steady to 50 cents lower midweek. Wednesday's slaughter is expected at 475,000 head. Saturday runs are expected near 50,000 head.
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