GENERAL COMMENTS: Livestock trade was mixed Tuesday. Hog futures backed away from early week support. On the other hand, despite midday pressure, live cattle futures bounced higher on demand strength. Cash cattle trade remained quiet Tuesday afternoon with bids and asking prices not fully defined. Increased interest is expected from both sides over the next couple of days. But, given the wide futures trade ranges, sales may not develop until later in the week despite the recent trend for Southern trade to develop on Wednesday. The National Daily Direct afternoon hog report was $0.60 higher ($67-$77 per cwt, weighted average $75.30) on 11,515 head sold. Corn futures surged higher following Tuesday's USDA report with July up 12 cents per bushel. The Dow Jones Index was 14 points lower with the NASDAQ down 2 points.
LIVE CATTLE: Despite feeder cattle softness, live cattle futures saw late-day gains, closing $0.40 to $1.02 higher. Moderate-to-firm support developed in the last hour of trade following firm pressure at midday. Futures saw wide swings throughout the day as the focus shifted between expected strong demand and rising production costs due to a sharp rally in corn prices. Traders seemed to eventually shrug off the higher corn prices on thoughts a portion of the higher corn prices had already been worked through the complex. Beef cut-outs: mixed, down $0.54 (select, $208.25) to up $0.73 (choice, $222.39) with good demand and moderate offerings, 110 loads (66 loads of choice cuts, 26 loads of select cuts, 5 loads of trimmings, 14 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL: Steady. A lack of direction is still seen through the complex with bids and asking prices still generally undefined. The lack of urgency for cash business to get done this week may allow for a more traditional Friday trade schedule.
FEEDER CATTLE: Feeder cattle futures came under pressure following the rally in corn futures. Futures closed $0.22 to $1.70 lower. Double-digit gains in corn prices following a bullish USDA report raised concerns about long-term feed supplies as well as production costs. The CME cash feeder index for 6/10 was unavailable.
LEAN HOGS: Higher corn prices also pressured lean hogs Tuesday, pushing futures $0.20 to $2.95 lower. Futures bounced back and forth in a wide range Tuesday, with December nearly posting a limit loss. This increased volatility creates more uncertainty in the lean hog trade through the coming days. Pork prices slipped lower following mixed primal cut shifts. Pork cutout values fell $0.30 per cwt, moving to $83.76 per cwt on 393 loads. CME cash lean index for 6/7 is $79.95, down $0.35. The DTN Projected lean index for 6/10 was unavailable at the time these comments were posted.
WEDNESDAY'S CASH HOG CALL: Steady to $1 lower. Little additional direction is expected midweek as packers continue to source market-ready hogs within a moderate trading range. Most bids are expected to be steady Wednesday morning. Wednesday slaughter numbers are expected at 474,000 head, with runs Saturday near 63,000 head.
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