Firm gains have developed following sluggish morning trade. The focus on outside market strength is helping to add increased underlying support through the entire complex. Corn futures are higher in light morning trade. December corn futures are 1 1/4 cents higher. Stock markets are higher in active trade. Dow Jones is 192 points higher with NASDAQ up 23 points.
LIVE CATTLE:
Live cattle futures are steady to higher midday Wednesday with strong underlying support still seen in August futures as very limited activity holds as traders attempt to exit the lightly traded and soon to expire complex. Other nearby contracts are showing much less direction with prices steady to 5 cents higher, The firm support seen Wednesday morning in outside trade helped to pull price levels away from session lows, but the inability to sustain buyer interest leaves the market generally weak and vulnerable for another downside market shift over the next couple of days. Traders continue to remain encouraged by the ability for boxed beef values to rally back from Tuesday's losses, but sustained support will become a challenge given the limited procurement losses that were predicted following the Tyson plant fire. The wide spread between cash cattle and beef values will leave the market on edge as traders expect that this relationship cannot be sustained. Cash cattle interest still remains sketchy at best with a few token bids developing in Texas as $101 per cwt live basis. In general, most of cattle country remains quiet with packer interest still remaining undeveloped for the week. Bids may become more evident through the day Wednesday, although the wide gap between asking prices and early bids would suggest that trade may be pushed off until late in the week. Asking prices remain at $108 live in the South and $178 to $180 dressed in the North. Boxed Beef cut-outs at midday are mixed, $0.50 higher (select) and down $1.68 (choice) with moderate movement of 97 total loads reported (36 loads of choice cuts, 17 loads of select cuts, 6 loads of trimmings, 38 loads of ground beef).
FEEDER CATTLE:
Active gains have moved back into feeder cattle trade midmorning with outside market support helping to spark additional underlying interest through the entire complex. This may help to bring about increased trade volume through the entire cattle market. September futures remain firmly higher at $134.40 per cwt at midday, but a move above $136.60 per cwt would be needed in order to break out of the sideways trading pattern seen during the last couple of weeks. Continued steady buying support is still likely the best driver for increased commercial interest moving back into the complex through the end of the month.
LEAN HOGS:
Lean hog futures have quickly bounced higher and lower in a wide trading range Wednesday morning with uncertainty following market fundamentals, while trades seem less dogmatic about the direction of the economy midweek. Remaining 2019 contract months posted light to moderate pressure as strong losses redeveloped in cash hog and wholesale pork values midweek. The continued active pressure in belly cuts has caused traders to become more cautious about short-term meat demand. Light to moderate gains are holding through the rest of the complex as the focus on early 2020 contracts and the optimism that additional global demand will be seen even if China is not a larger player in the market is helping to solidify market activity. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $1.57 at $60.28 per cwt with the range from $52 to $63.00 on 3,440 head reported sold. Pork values continue to weaken following additional sharp losses in belly cuts. Pork cutouts fell $2.26 per cwt at $71.81 per cwt with 177 loads traded. Lean hog index for 8/26 is $73.52, down 0.98, with a projected two-day index at $72.63, down 0.89.
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