GENERAL COMMENTS:
The livestock complex is seeing more support for the cattle contracts as the day nears noon, while the hog contracts are still trading lower. No cash cattle trade has developed and it's looking like the week's business will be delayed until Thursday at this point. December corn is down 16 cents per bushel and December soybean meal is up $1.00. The Dow Jones Industrial Average is up 51.92 points.
LIVE CATTLE:
The live cattle complex is now trading higher as continued pressure in the corn sector lends the market some support and seeing mixed to higher tones in boxed beef prices is encouraging as well. The real question that's holding traders back at this point is: what will cash prices do? Packers were able to get a sizeable volume of cattle committed last week, and they've really pulled back the reins on processing speeds. All of that could mean that their need to buy more cattle in the cash market this week is limited. Adversely, however, it's also important to realize that 1) front-end supplies of market-ready cattle are thin now and will be well into the fall, so packers are going to have to stay more active and engaged in the cash market than what they'd like, 2) with boxed beef prices seeing more support over the last week, packers need to ensure that they have enough product to market, and 3) with cold storage supplies being thin, packers can't simply open the flood door to cold storage supplies and pull out more meat, they're again going to need to procure more cattle through the cash market. August live cattle are up $0.50 at $178.80, October live cattle are up $0.65 at $180.25 and December live cattle are up $0.60 at $183.90. No cash cattle trade has developed at this point and it's looking like trade could be delayed until Thursday.
Boxed beef prices are mixed: choice down $0.37 ($303.85) and select up $2.95 ($280.50) with a movement of 71 loads (48.71 loads of choice, 12.75 loads of select, zero loads of trim and 9.17 loads of ground beef).
FEEDER CATTLE:
As the nearby corn contracts trade an additional $0.14 to $0.16 lower, the feeder cattle complex is charging higher as its market believes in the support overflowing from sharply higher sales in the countryside and breathes a sigh of relief from the downturn in corn. It's also helping matters that the live cattle contracts are trading slightly higher too, but more than anything, the tremendous support currently being found from strong feeder cattle sales can no longer go overlooked this week. August feeders are up $0.70 at $243.92, September feeders are up $1.12 at $247.50 and October feeders are up $1.15 at $249.55.
LEAN HOGS:
The lean hog complex would like to keep with Tuesday's trend and continue to trade higher, but with mixed support and signals from the market's fundamentals, coming up against the resistance at $85.00 in the spot October contract is just too much pressure right now. The cash hog market is seeing a little more interest Wednesday morning, but packers remain least aggressive in the Eastern Corn Belt. Pork cutout values are a wash at midday but if packers could see a little better support/demand in this afternoon's report, then Thursday's cash market could potentially see more hogs traded. August lean hogs are down $0.45 at $101.20, October lean hogs are down $1.15 at $83.25 and December lean hogs are down $0.87 at $76.12.
The projected lean hog index is delayed from the source. Hog prices are higher on the Daily Direct Morning Hog Report, up $3.97 with a weighted average price of $106.15, ranging from $90.00 to $108.00 on 8,263 head and a five-day rolling average of $104.24. Pork cutouts total 137.74 loads with 124.43 loads of pork cuts and 13.31 loads of trim. Pork cutout values: down $0.09, $112.97.
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