Firm underlying support is redeveloping in lean hog futures with all but October and December contracts holding triple-digit gains Friday morning. Initial pressure developed in feeder cattle following early gains in corn prices. Corn futures are mixed in light trade. September corn futures are steady. Stock markets are lower in light trade. Dow Jones is 230 points lower with NASDAQ down 114 points.
LIVE CATTLE:
Mixed trade is seen Friday morning due to light overall volume developing across the complex. Nearby futures have been able to hold light to moderate gains, while deferred futures are trading steady to 20 cents lower based on early pressure in feeder cattle. The underlying support that has developed through the last half of the week is helping to hold October futures above $107 per cwt. Recent gains have not been aggressive in live cattle trade, although the focus on stringing together a few narrow to moderate gains is helping to firm market support and potentially create a solid base to build upon early next week. Cash cattle trade is starting to slowly develop late Friday morning with a few live deals seen in the North at $113 per cwt. There still is not enough trade to determine a market trend, as increased packer interest is expected through the rest of the day. Limited bids of $179 per cwt dressed basis are seen in Nebraska, but are being quickly passed by feedlot managers. Asking prices are seen at $112 to $113 in the South and $183 in the North. Boxed Beef cut-outs at midday are mixed, $0.54 higher (select) and down $0.13 (choice) with light movement of 50 total loads reported (24 loads of choice cuts, 11 loads of select cuts, 3 loads of trimmings, 12 loads of ground beef).
FEEDER CATTLE:
Initial gains in corn prices Friday morning created moderate to strong weakness in all feeder cattle trade. Early pressure posted triple digit losses based on concerns that aggressive end-of-week grain market gains would derail recent commercial support moving into the complex. As the morning continued, buying in corn markets eroded. This helped to pull feeder cattle futures off morning, losses, but the tone still remains weak given light volume Friday in all cattle markets. If current buyer support holds in live cattle trade, feeder cattle futures may stabilize before closing bell.
LEAN HOGS:
Light pressure is seen in October and December lean hog futures with traders slowly but steadily taking protection following recent market support. But firm gains have quickly developed through the rest of the complex, confirming the renewed buyer support developing in hog futures and potential interest seen at the end of the week. A move higher in most contract months Friday would help to confirm the change in market trend, potentially sparking additional bullish support early next week. Cash prices lower on the National Direct morning cash hog report. The weighted average price is down $0.79 at $70.98 per cwt with the range from $62 to $77 on 8,141 head reported sold. Pork values rallied higher following strong gains in ham and belly cuts. Pork cutouts added $0.91 per cwt at $89.60 per cwt with 187 loads traded. Lean hog index for 8/7 is $82.85, down 0.58, with a projected two-day index is $82.33, down 0.52.
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