Firm price support early Tuesday morning has slowed significantly through the complex with traders focusing on limited trade activity developing as the week continued. Pressure has developed in deferred lean hog trade, due to limited follow through interest as the week continues. Corn futures are higher in light trade. September corn futures are 4 cents higher. Stock markets are lower in light trade. Dow Jones is 65 points lower with NASDAQ down 26 points.
LIVE CATTLE:
Limited activity is seen Tuesday morning with live cattle futures stuck in a narrowly mixed trading range. Nearby futures are holding from 12 cents lower to 10 cents higher at midday, although the tone of the complex remains firm following recent gains and underlying support developing from feeder cattle trade. The potential for increased underlying support may help to bring additional gains through the rest of the week, although volume is likely to remain extremely light surrounding the Fourth of July holiday. Cash cattle interest is slowly improving with a few more bids developing as the day continues. Live bids of $107 are reported in the South, while bids of $178 are seen dressed basis in the North. This is still well below asking prices of $110 and higher live, and $182 dressed. Even though both sides desire to trade cattle before the holiday break, it is likely to be Wednesday or later before trade is seen. Boxed Beef cut-outs at midday are higher, $0.92 higher (select) and up $0.53 per cwt (choice) with moderate movement of 93 total loads reported (37 loads of choice cuts, 25 loads of select cuts, 4 loads of trimmings, 27 loads of ground beef).
FEEDER CATTLE:
Firm follow-through gain are holding midday despite pressure across the rest of the livestock trade and renewed gains in corn prices. Traders are focusing on the ability to build increased technical support through early July as prices continue to bounce off recent support levels, looking for increased commercial interest during early July. Summer and fall contracts are sluggish with 70 to 90 cent gains, although firming support is seen in late 2019 contract months as traders continue to assess the recent adjustments in feed costs and potential shifts in demand this may cause through the end of the year.
LEAN HOGS:
Initial support seen Tuesday morning has slowly trickled away as traders become more focused on the ability that prices may hover in current trading ranges over the next several weeks. Although there continues to still be hope that recent trade talks will cause some short term buying activity from China during July in order to fill the supply shortage, early-week optimism is fading on the realization that a long-term fix for the current trade war may take months or even years to iron out. This is curbing support in deferred futures with prices backing away from initial support. Cash prices are unreported due to packer delays on the National Direct morning cash hog report. Cash prices are unreported on the Iowa/Minnesota Direct morning cash hog report. Pork values firmed slightly although primal cuts remain mixed in a wide range. Pork cutouts added $0.15 per cwt at $73.43 per cwt with 210 loads traded. Lean hog index for 6/28 is $74.97, down 1.08, with a projected two-day index unreported at this time due to submission delays.
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