Tuesday Closing Livestock Market Summary - Hog Futures Surge Higher

GENERAL COMMENTS:

Sharp gains developed in lean hog futures Tuesday, sparking additional bullish market action as nearby contracts tested limit gains. Firm support came from gains in cash hog trade. Corn futures moved higher in sluggish trade. September futures are 3 cents per bushel higher. Dow Jones Index is 177 points higher with NASDAQ up 47 points. Cash cattle trade is quiet. A few bids and asking prices are likely to develop during the day Wednesday. National Daily Direct afternoon hog report is $2.71 higher with a weighted average of $78.80 per cwt. Full range of $64 to $82.50 per cwt on 11,522 head sold.

LIVE CATTLE: Support continued in live cattle futures Tuesday ($0.17 to $0.72 higher). Firm gains were in the front-month contracts as prices settled above $109 per cwt. The consistent buyer support in over the last week is building additional strength through the entire complex. Beef cut-outs: higher, $0.12 higher (select, $189.71) and up $0.46 (choice, $213.78) with light demand and offerings, 131 loads (64 loads of choice cuts, 34 loads of select cuts, 9 loads of trimmings, 24 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL: Steady. Bids and asking prices remained generally subdued Tuesday, which will leave markets quiet most of Wednesday. Packer interest is expected to develop through the morning with a few token bids possible.

FEEDER CATTLE: Mixed futures trade limited buyer interest as traders backed away from initial pressure ($0.05 lower to $0.10 higher). Following early losses, limited buying moved back into the complex. But the support from live cattle trade was limited as most contracts were unable to break away from single-digit moves at the end of the session. Traders remain optimistic but cautious given the trend to shift prices back and forth in a moderate to wide range. CME cash feeder index for 7/20 is $138.16, down 0.49.

LEAN HOGS: Sharp gains sparked increased support through the entire complex ($0.87 to $2.95 higher). Triple-digit gains were seen August futures and the contract flirted with limit gains through the afternoon. The inability to move prices to the $3 per cwt limit will keep midweek limits unchanged, but the overall support seen through the complex is expected to bring traders back to the table. Strong fundamental support is seen during the week, which may add to the optimism across the entire complex. Pork values slipped higher in mixed primal trade. Pork cutout values fell $0.01 per cwt, moving to $80.60 per cwt on 351 loads. CME cash lean index for 7/18 is $72.40, up 0.88. DTN Projected lean index for 7/19 is $73.27, up 0.83.

WEDNESDAY'S CASH HOG CALL: Steady to $3 higher. Another round of active support is moving into the complex with bids expected to be mostly $1 per higher early Wednesday. Wednesday slaughter numbers are estimated at 477,000 head. Saturday runs are estimated at 9,000 head.

#completeherdhealth