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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