Active buyer support is moving into cattle futures with feeder cattle trade once again leading the market. Strong triple-digit gains are seen in all feeder cattle trade with nearby futures trading $4 per cwt and higher at midday. This is causing firm underlying support to move into live cattle trade, although volume remains moderate at best. Hog futures have continued to struggle with early mixed trade leaving to additional market pressure through the session. Corn futures are lower in moderate trade. July corn futures are 1/4 cent lower. Stock markets are higher in light trade. Dow Jones is 454 points higher with NASDAQ up 153 points.
LIVE CATTLE:
Triple-digit gains have developed in live cattle futures with traders holding nearby contracts $1 to $1.70 per cwt higher midday Tuesday. A combination of increased noncommercial support moving back into the complex following the test of long-term lows in the complex is being coupled with news reports that a BSE cow has developed in Brazil. This could shake up global buying activity for countries that primarily use Brazilian beef. But the impact is still uncertain as there is still much more information needed before long-term buying decisions are made. But the initial market reaction has been generally positive with strong gains in feeder cattle as traders look at this being a potential long-term shift in global beef supplies. Cash cattle trade is developing in the South at $112 to $113 per cwt. This is steady to $1 per cwt lower than Monday's trade, and $2 to $3 per cwt lower than last week. Live trade is also seen in the North at $114 per cwt, $2 per cwt lower than last week. Dressed trade is still undeveloped, although bids are starting to be seen at $183 per cwt. Asking prices are at $115 and higher live and $188 and higher dressed. The early-week movement of cash cattle may cause most sales to be wrapped up by midweek. Boxed Beef cut-outs at midday are higher, $0.56 higher (select) and up $0.37 per cwt (choice) with light movement of 70 total loads reported (26 loads of choice cuts, 30 loads of select cuts, 7 loads of trimmings, 7 loads of ground beef).
FEEDER CATTLE:
Sharp gains have quickly and aggressively moved into feeder cattle trade Tuesday morning. A combination of previously oversold markets over the last couple of weeks and reports that mad cow disease has been found in Brazil is helping to build overall support through the cattle complex. It is uncertain what the overall long-term reaction to the market will be of this discovery, or if and how it may affect overall U.S. beef demand. Initial market reactions are showing positive signs as it could change some global buying decisions around the world, but it is too early to tell how much of or how long a price impact might be seen. The potential to move feeder cattle futures to limit highs is developing with all nearby contracts holding gains of $4 per cwt or greater.
LEAN HOGS:
Firm pressure continues to be seen in several nearby contracts as traders are looking for market stability during early June. The strong shift higher in cattle trade has helped to divert market pressure off of lean hog trade through most of the morning, allowing nearby contracts to trade steady to 70 cents lower at midday. Even though pork values rebounded early in the week, the concern that wild price shifts in traditionally summer pork products such as ribs and belly cuts (bacon) have been variable at best is causing widespread concern. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.15 at $75.96 per cwt with the range from $68.00 to $78.00 on 7,012 head reported sold. Cash prices unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork values turned lower once again with variable market shifts seen in primal cuts. Pork cutouts fell $1.04 per cwt at $83.87 per cwt with 242 loads traded. Lean hog index for 5/31 is $81.28, down 0.64, with a projected two-day index at $80.90, down 0.38.
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