Tuesday Midday Livestock Market Summary - Cattle Markets Stabilize

GENERAL COMMENTS:

Cattle futures bounced higher early Tuesday, as traders try to bring a sense of stability back into the complex following aggressive losses the last couple trading sessions. Although expanded limits are still available in live cattle and feeder cattle through the rest of the session, it appears that these will not be needed unless some major news disrupts the complex in the next couple hours.

Despite the initial triple-digit gains, live cattle and feeder cattle contracts have moved to a narrowly mixed range at midday with little incentive to move price levels from the current levels. Hog futures remained mixed through the morning with midday prices mostly lower in a narrow to moderate range. Traders will continue to focus on short- and long-term supply levels in the cattle markets, which could create some uncertainty following the recent widespread liquidation. December corn is down 4 1/2 at $4.858 and December soybean meal is up $0.50 at $421.00. The Dow Jones Industrial Average is up 202.31 at 33,138.72.

LIVE CATTLE:

Strong early gains developed in live cattle futures Tuesday morning. Following the sharp losses Monday, positive price shifts was a breath of fresh air. However, buyer momentum seemed to be very thin as prices moved to a mixed trading range during morning activity. With October and December contracts still holding below $180 per cwt, there's concern that there may not be significant and long-lasting buyer support willing to step back into the market. Traders are still concerned about just how the most recent cattle on feed numbers will impact overall long-term beef supply levels.

Over the next couple of weeks, the overall cattle marketing numbers may also have a much more significant impact in the short-term price levels. The ability to sustain a moderate range in cash cattle prices and beef values will be closely monitored for all futures trade. Cash cattle markets remain quiet with asking prices and bids still yet to be established. It is likely to be midweek or later before active interest and potential cash market sales develop. The direction of beef values and futures trade may have a significant impact in cash trade this week, as so far cash markets have not been negatively impacted by the recent pullback in futures prices. October live cattle are $0.63 higher at $178.875, December live cattle are $0.50 lower at $177.85, February live cattle are $1.03 lower at $179.95.

Boxed beef prices are higher: choice up $1.21 ($305.75) and select up $2.29 ($283.31) with a movement of 48.00 loads (23.92 loads of choice, 11.10 loads of select, 3.98 loads of trim and 9.45 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have been able to avoid an additional day of sharp losses Tuesday following strong market pressure in each of the last three trading sessions. Firm gains developed across the complex Tuesday morning, but the lack of depth in buy orders left most contract months unsupported. At this point, October futures are the only contract holding onto early gains, with all other contracts holding moderate to active losses. Although the triple-digit price reductions Tuesday morning in November through April contracts are disappointing, the fact that markets have not taken advantage of expanded trading limits is creating a sense of stability across the entire complex. Traders are not only focusing on long-term supply issues, but the direction over the next couple weeks in grain trade and outside markets will likely have a significant impact in drawing noncommercial trade activity back into the feeder cattle market. October feeders are $1.88 higher at $239.5, November feeders are $1.13 lower at $234.675 and January feeders are $1.40 lower at $234.3.

LEAN HOGS:

Lean hog markets inched higher in light initial trade, but at midday, all but spot December contracts have eroded early gains. Moderate support in pork cutout values Tuesday morning was not enough to outweigh the overall weaker technical tone holding in the lean hog futures complex. Even with spot contracts able to hold the current gains, the lack of additional follow through buyer support and potential that traders still have a "wait and see" approach to any short-term gains in the market could limit additional upward momentum over the near future. December lean hogs are $0.63 higher at $66.8, February lean hogs are $0.25 lower at $69.95 and April lean hogs are $0.60 lower at $76.00.

Hog Prices are unreported at this time on the Daily Direct Morning Hog report due to packer submission issues. Pork Cutouts totaled 239.49 loads with 207.14 loads of pork cuts and 32.35 loads of trim. Pork cutout values are up $1.82 at $88.79.