Sharp losses have developed in cattle futures Wednesday morning as weakness continues to quickly develop through the complex. Early losses have eased slightly in live cattle and feeder cattle markets, pulling markets off of session lows. This could allow for some breathing room later in the session despite the extremely light volume through the end of the session. Gains seen during the morning in lean hog trade have started to erode as pressure in the deferred contracts are starting to overshadow the lightly traded market. Corn prices are lower in light trade. July corn futures are 1/2 cent lower. Stock markets are higher in light trade. The Dow Jones is 32 points higher while Nasdaq is up 10 points.
LIVE CATTLE:
Pressure has developed through cattle markets with August through February futures trading $1 per cwt lower at midday. Losses continue to remain significant, but are well off of session lows, as traders have limited losses to nearly half of the earlier pressure seen through the morning. Trade volume is expected to remain sluggish through the rest of the afternoon. Cash cattle trade took place in the Fed Cattle Exchange Auction report today listed a total of 2,648 head, with 1,333 actually sold, and 1,351 head listed as unsold. The state by state breakdown looks like this: KS 508 total head, with 508 head sold at $131.00-$132.75; NE 950 total head, with 310 head sold at $133.00-; TX 544 total head, with 401 head sold at $132.25-$132.50; CO 287 total head, all unsold; IA 281 total head, all unsold; other states 114 total head, with 114 head sold at $132.50, all in Oklahoma. The weighted averages are as listed: 1-9 day delivery: 1,086 head, $132.54; 1-17 day delivery 144 head, $132.50; 10-17 day delivery 133 head, $132.50. Feedlot bids started to develop through end of the morning Wednesday at $130 to $132 in the South live basis with bids seen in the North at $208 per cwt. Asking prices are currently seen at $136 to $138 in the South and $215 in the North. Beef cut-outs at midday are mixed, $0.82 lower (select) and up $0.18 per cwt (choice) with light movement of 80 total loads reported (36 loads of choice cuts, 23 loads of select cuts, 4 loads of trimmings, 15 loads of ground beef).
FEEDER CATTLE:
Sharp losses have developed across the cattle market with triple digit losses seen in feeder cattle trade at midday. Even though prices have backed away from session losses near $4 per cwt, the significant pressure is putting some significant uncertainty on the enter market and could limit the overall outlook of cattle market support through the next several trading sessions. May futures are lightly traded and holding light 40 cent losses while the rest of the complex is under triple digit losses based on the underlying weakness through the rest of the complex.
LEAN HOGS:
Firm buyer support has held in nearby contracts as traders moved into nearby contracts. But the inability to draw additional buyer support back into the market has severely limited overall market activity in all markets and created pressure in deferred futures. Weakness is seen in all but summer contracts as traders are lightly traded through the entire complex. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.44 at $70.77 per cwt with the range from $66.00 to $72.00 on 4,925 head reported sold. Cash prices are higher on the Iowa Minnesota Direct morning cash hog report. The weighted average price added $0.02 at $71.66 per cwt with the range from $66.00 to $72.00 on 2,010 head reported sold. The National Pork Plant Report reported 167 loads selling with prices adding 0.33 per cwt. Lean hog index for 5/22 is at $75.94 up $0.05 with a projected two-day index of $76.07 up $0.13.
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