Lean hog futures have led the livestock complex lower Tuesday morning with technical pressure quickly adding to the limit or near limit losses seen Monday. Although futures have backed away from session lows at midday, the underlying weakness across the lean hog and live cattle market continues. Corn futures are lower in light trade with September down 5 3/4 cents. Stock markets are lower in light trade. The Dow Jones is 33 points lower with the NASDAQ down 25 points.
LIVE CATTLE:
Live cattle futures have eroded Tuesday morning with increased pressure seen in nearby futures. This latest softness is putting more emphasis on continued underlying bearishness through the complex and could lead to increased end-of-the-month liquidation. Concerns that beef demand may not show significant improvement over the near future could add even more softness to the entire complex. Cash cattle interest remains generally sluggish with a few token bids developing in Nebraska at $183 per cwt. This is still well below asking prices of $186 per cwt, and could delay any trade until later in the week. All other areas remain quiet late Tuesday morning. Boxed beef cutouts at midday are higher, up $1.74 (select) to up $1.20 per cwt (choice) with light movement of 74 total loads reported (22 loads of choice cuts, 20 loads of select cuts, 4 loads of trimmings, 27 loads of ground beef).
FEEDER CATTLE:
Limited support early Tuesday morning has gained momentum with nearby contracts holding 75- to 80-cent gains due to moderate pressure in grain trade. The weakness in grain markets has sparked renewed interest in nearby and deferred feeder cattle futures, although the tone of other livestock trade is extremely weak. The breakaway from live cattle market direction will put more focus on production costs through the end of the month rather than the general direction or strength of the cattle market.
LEAN HOGS:
Lean hogs are triple digits lower at midday, although prices have pulled back from session lows as seller interest seems to be slowing after losses of $4 to $5 per cwt in the last two sessions. Although it is premature to expect active buying to push prices higher over the near future, there seems to be support building around $74 to $75 per cwt in fourth-quarter contracts. This could help to stabilize the overall hog complex and bring additional support to other livestock markets. Cash prices are unreported due to delays on the National Direct morning cash hog report. Pork values posted sharp gains on gains in ham and belly cuts. Pork cutouts added $3.41 per cwt at $87.45 per cwt with 119 loads traded. Lean hog index for 7/26 is $80.36, up 1.50, with a projected two-day index is unavailable due to reporting delays.
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