Sharp losses developed Friday morning with buyers unwilling or unable to step into the complex to limit the market slide at the end of the week. This has pushed nearby live cattle and lean hog futures to limit lows, with increased weakness developing in the complex. Corn futures are lower in light morning trade. December corn futures are 4 cents lower. Stock markets are higher in light trade. Dow Jones is 95 points higher with NASDAQ up 2 points.
LIVE CATTLE:
Active pressure continues to flood the live cattle futures as the latest round of liquidation started just after opening bell. October futures are trading at limit losses of $3 per cwt with prices at $94.85 per cwt. The amount of electronic trade focusing to technical selling activity is driving the market lower through the end of the week following the inability for nearby live cattle futures to defend contract lows on Thursday. At this point, with the bearish momentum completely in control of live cattle futures, market fundamentals mean very little, and likely will not be a priority until the downward market momentum subsides. Cash cattle trade may be done for the week given the bearishness of futures trade Friday morning. Although there are a few asking prices in the South at $102 per cwt, bids are silent. At this point packers appear to have enough cattle to fill needs and are unwilling to actively put out bids given the downturn in the market. Feeders on the other hand, are hoping that next week will be more supportive once the aggressive market shifts work through the complex at the end of the week. Boxed beef cutouts at midday are lower, $1.45 lower (select) and down $1.26 (choice) with light movement of 67 total loads reported (37 loads of choice cuts, 14 loads of select cuts, no loads of trimmings, six loads of ground beef).
FEEDER CATTLE:
Narrow-to-moderate losses early in the session have been unable to hold as traders are pushing prices $2 to $3 per cwt lower following limit losses in live cattle trade. The underlying pressure in the complex continues to add uncertainty to the complex, adding even more volatility to an already bearish market. Limited volume is expected as traders continue to focus on weakness developing across the rest of the livestock market.
LEAN HOGS:
Extreme bearishness has flooded the entire livestock complex with nearby lean hog contracts holding limit losses of $3 per cwt at midday. The overall lack of support at the end of the week follows market optimism and hope that trade talk announcements would help support the overall market structure. With light export sales to China reported through the week, traders remained disappointed due to the fact that pork prices in China are reported so high, and China seems to be actively in the market for pork from other sellers at this point. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.80 at $52.43 per cwt with the range from $48 to $54 on 7,910 head reported sold. Pork values rebounded in late week support. Pork cutouts added $1.82 per cwt at $73.78 per cwt with 126 loads traded. Lean hog index for 9/4 is $65.25, down $1.32, with a projected two-day index is $64.69, down $0.56.
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