GENERAL COMMENTS:
Livestock futures have gained light to moderate buyer support, as traders shake off the pressure seen over the last couple of days with a new month and new quarter to focus on. The reality is there is very little new information available in the market and overall trade interest should be quiet this entire week due to the holiday. Each day there will likely be even less participation and market interest ahead of the holiday with futures markets closed Friday. Firm triple-digit gains have developed in both live and feeder cattle contracts Wednesday morning, but this is still unable to reverse the strong market weakness seen over the last week. Lean hog futures are mostly higher in limited but positive trade interest with narrow gains able to be sustained through most of the morning session. December corn is up 4 3/4 at $4.408 and December soybean meal is up $1.70 at $304.8. The Dow Jones Industrial Average is up 407.68 at 52,726.88.
LIVE CATTLE:
Live cattle futures have firmed slightly at midweek, although the tone and activity of the entire cattle complex -- and especially the live cattle market -- seems cautious at best. Following the strong market move lower over the past couple of weeks, traders remain concerned about the ability to sustain beef values and product support through the last summer and fall months. At this point, the ability to move additional domestic product at higher price levels this year has gone well. But the underlying concern remains about the economy, whether consumers will start cutting budgets, and where the first and most drastic cuts will be seen. This is leading factor for the recent market volatility in both feeder cattle and live cattle futures over the past couple of months. Cash cattle markets remain generally undeveloped Wednesday morning. A few bids are now on the table in parts of eastern Nebraska, but asking prices remain very elusive; the rest of cattle country remains very quiet. Packer inquiry should continue to improve as the day progresses. It is expected that both sides will try to wrap things up before Friday and extend the holiday weekend. But for now, there is likely to be a wide gap to close before any significant trade can be agreed on. August live cattle are $0.25 higher at $242.675, October live cattle are $0.90 higher at $237.55, December live cattle are $0.88 higher at $237.25.
Boxed beef prices are Lower: choice down $0.19 ($392.97) and select down $1.10 ($370.58) with a movement of 59.40 loads (39.78 loads of choice, 6.49 loads of select, 6.31 loads of trim and 6.82 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures are leading the cattle market and entire livestock complex higher Wednesday morning as traders are covering previous losses seen at the end of June. Although very little has changed fundamentally or technically in the market over the past couple of days, the fact that traders are working on a new month and quarter of books has in itself helped spark some buyer support back into the complex. All nearby contracts are holding gains of $2 per cwt or greater at midday. Without any additional significant shifts in outside market news, it is likely this support will hold, allowing traders to potentially carry the renewed interest into the end of the week. With markets closed Friday for the Fourth of July holiday, and overall trade interest subdued through the entire week due to holiday and vacation schedules, it is not surprising that overall market participation has been limited during the entire week. August feeders are $1.98 higher at $366.575, September feeders are $1.80 higher at $364.325 and October feeders are $1.78 higher at $361.425.
LEAN HOGS:
Lean hog futures are mostly higher Wednesday morning, although limited interest and new market information as the session has continued is eroding a portion of early support. Mixed trade with light pressure in nearby contracts is being offset by light to moderate buying activity very slowly trickling into deferred contracts. Traders seem to be finding some underlying support at current price levels, although prices are still well below the 40-day moving average in all nearby contracts. The longer-term concern about expanded pork demand and the ability to open up increased export trade continues to be the biggest shadow hovering over the market heading into July. July lean hogs are $0.45 lower at $93.875, August lean hogs are $0.28 higher at $98.475 and October lean hogs are $0.53 higher at $82.525. Hog Prices are higher on the Daily Direct Morning Hog report, up $0.11 with a weighted average of $97.16, ranging from 94.00 to 98.00 on 4,125 head with a five-day rolling average of 97.14. Pork cutouts totaled 149.81 loads with 120.83 loads of pork cuts and 28.98 loads of trim. Pork cutout values are up $0.83 at $95.62.
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