GENERAL COMMENTS: Hog futures bounced higher in limited support as August futures led the complex higher based on trade talk next week with China. Any glimmer of hope of trade progress seems to get nearby contracts fired up. Cattle futures shifted lower as traders backed away from early week gains, although no additional direction developed within the current sideways trading range. Corn futures continued lower Wednesday. July futures is 8 3/4 cents per bushel lower. Dow Jones Index is 69 points higher with Nasdaq up 25 points.
CASH MARKETS: Cash cattle interest remains sluggish Wednesday afternoon with bids redeveloping in several areas. Live bids are steady with early week bids at $109 per cwt, while dressed bids have firmed to $181 per cwt during the day. This is still well below asking prices; unable to gain any attention from feeders. Trade may be delayed until late in the week given the lack of direction in futures trade and choppy moves in beef values. National Daily Direct afternoon hog report is delayed and unreported at the time this was published.
LIVE CATTLE: Firm pressure developed Wednesday as traders took the opportunity to adjust positions following early week gains ($0.55 to $1 Lower). Live cattle traders steadily pulled back from early week gains based more on market adjustments through the week than any fundamental or technical factors. The announcement by the federal reserve to leave interest rates unchanged had little direct impact on beef prices or expected supply and demand. However, it did seem to shed some light on the fact that market stability may curb overall consumer spending, slowing demand long-term. With current cattle supplies and overall feed prices showing gains, stable demand is not encouraging for the cattle complex. Beef cut-outs: higher, $0.44 higher (select, $202.24) and up $1.06 (choice, $221.59) with good demand and moderate offerings, 184 loads (83 loads of choice cuts, 40 loads of select cuts, 12 loads of trimmings, 48 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL: Steady. Limited activity midweek is putting the emphasis on late week trade. Packer interest remains modest at best, although bids have developed in most areas Wednesday.
FEEDER CATTLE: Feeder cattle futures softened following active live cattle pressure ($0.72 lower to $0.25 higher). Falling grain prices had limited underlying support to feeder cattle trade. Mixed trade left markets uncertain, with spot futures leading the complex lower while slight gains trickled into deferred contracts. Feeder cattle futures have wandered within a $5 per cwt trading range over the last three weeks, creating a strong boundary, but there a lot of wiggle room within this range before any significant technical direction develops. Midweek short covering was also attributed to the late day pullback in prices. CME cash feeder index for 6/18 is $133.02, down $0.19.
LEAN HOGS: Underlying support redeveloped Wednesday as traders focus on potential upcoming trade talks ($0.62 lower to $1.30 higher). Strong gains steadily moved into lean hog trade Wednesday as traders continue to focus on the potential for additional trade talks at the G-20 Summit next week. Although it still may be a long and winding road before a trade deal gets done, the fact that talks will take place is a positive move. Nearby lean hog futures factored "hope" into market prices Wednesday with August contracts leading the complex $1.30 per cwt higher. Deferred futures remained under limited pressure as any renewed trade deal will impact nearby contracts much more than long-term direction. Pork prices tumbled lower based on firm losses in most primal cuts. Pork cutout values fell $3.46 per cwt, moving to $77.69 per cwt on 354 loads. CME cash lean index for 6/17 is $79.26, down $0.01. DTN Projected lean index for 6/18 is unavailable at this time.
THURSDAY'S CASH HOG CALL: Mixed. As packers attempt to uncover additional market ready hogs for daily production needs, bids are expected to range from $1 lower to 50 cents higher. Most bids are expected to be steady given the ability for most packers to supplement purchased hogs with hogs already sourced under contract. Thursday slaughter numbers are expected at 476,000 head. Saturday runs are expected at 88,000 head.
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