Triple-digit gains have swept through lean hog futures once again, as the narrow moves seen Monday allowed traders to regroup, focusing on longer term market support. Cattle futures are mixed as firm fundamental support in live cattle offset by light feeder cattle weakness. Corn futures are higher in light trade. September corn futures are 1/4 cent higher. Stock markets are mixed in light trade. Dow Jones is 51 points higher with NASDAQ down 2 points.
LIVE CATTLE:
Light to moderate gains have developed through the morning with nearby futures holding 60 cent gains at midday. The underlying support through the complex continues to focus on long term support that may continue to develop through the upcoming days as traders look for spill over support from the recent rally in hog trade. August futures have moved above $109 per cwt, and continue to test two month highs, although the intensity of buying appears to be slowing during the week. Cash cattle remain quiet with bids and asking prices still undeveloped. Given the firmness in live cattle futures, asking prices are expected to remain firm once prices are listed, which may delay trade until the second half of the week, and limit early bids from most packers. Boxed Beef cut-outs at midday are mixed, $0.44 higher (select) and up $0.37 per cwt (choice) with light movement of 61 total loads reported (37 loads of choice cuts, 12 loads of select cuts, 7 loads of trimmings, 6 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures remain under light pressure, but losses have quickly eroded through late morning. Nearby contracts are holding losses of 7 to 15 cents per cwt, but well off session lows of 60 to 70 cents seen early in the day. The firming support in live cattle trade and limited moves in corn trade is weakening any softness in feeder cattle trade, allowing buyers to return to the market with potential light to moderate gains by the end of the session.
LEAN HOGS:
Active late-morning gains have flooded the lean hog complex with August futures surging $2.67 per cwt with prices nearing $86 per cwt. The underlying support remains firmly planted in all nearby contracts as traders are focusing on the recent support in cash values and increased wholesale price levels. This may add even more support to the complex with increased commercial volume developing as prices distance themselves from recent summer lows. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.94 at $77.03 per cwt with the range from $64 to $82 on 6,092 head reported sold. Pork values shifted lower Tuesday backing away from previous gains. Pork cutouts fell $1.72 per cwt at $78.89 per cwt with 186 loads traded. Lean hog index for 7/19 is $73.27, up 0.87, with a projected two-day index is $74.29, up 1.03.
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