Active gains have quickly moved back into cattle and hog futures Monday morning. The entire complex still remains in a bearish market trend given sharp losses in each of the markets over the last week. Cattle futures are regaining market support following aggressive moves higher in wholesale beef values over the last week. Hog futures still remain extremely technically weak, but the complex remains oversold, which is allowing for sharp gains to develop Monday morning. Corn futures are lower in light to moderate morning trade. September corn futures are 6 3/4 cents lower. Stock markets are higher in light trade. Dow Jones is 251 points higher with NASDAQ up 34 points.
LIVE CATTLE:
Moderate to strong gains have redeveloped. October futures still remain stuck below $100 per cwt with initial buying Monday morning slowing as increased volume moves into the complex. Live cattle futures are expected to focus more on market stability following last week's pressure, likely limiting aggressive gains through the end of the month. With packer margins improving significantly last week due to aggressive boxed beef gains and lower cash cattle prices, there will be even more incentive to offset any production losses at the Kansas Tyson plant with increased chain speed and active weekend production schedules. Cash cattle activity remains quiet with show list distribution and inventory taking developing through the morning. Active trade is likely to be pushed off until late in the week. Boxed Beef cut-outs at midday are mixed, $0.88 higher (select) and down 0.16 (choice) with moderate light of 26 total loads reported (14 loads of choice cuts, 8 loads of select cuts, no loads of trimmings, 4 loads of ground beef).
FEEDER CATTLE:
Triple-digit gains are holding in feeder cattle trade as grain markets have once again focused on increased market pressure in both corn and soybean markets. At least temporarily, the focus has moved away from lower production levels of corn through the end of the year, which is helping to solidify buying in nearby feeder cattle trade. Lower market volatility is seen in the cattle complex as the packing industry becomes more accustomed to shipping cattle to other plants following the Tyson plant fire. Upside market potential still remains uncertain as traders still focus on logistical challenges through the entire industry.
LEAN HOGS:
Strong buyer support moved back into the complex early Monday morning following limit losses Friday. The technical pressure seen through the entire complex added increased weakness to the market and tested year-long lows in October futures. Although the tone of the market remains weak, trades appear to be focused on regaining solid footing based on market stability in pork values and potential domestic demand continuing strong over the next couple of months despite trade concerns with China. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $2.27 at $67.55 per cwt with the range from $59 to $72.50 on 4,922 head reported sold. Pork values firmed following recent wholesale pork pressure last week. Pork cutouts added $0.38 per cwt at $86.64 per cwt with 124 loads traded. Lean hog index for 8/15 is $79.024, down 0.32, with a projected two-day index is $78.55, down 0.47.
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