After trading lower through most of the session, lean hog contracts abruptly reversed to close with triple-digit gains. The cattle complex settled moderately lower, trimmed by profit-taking and the general lack of cash news.
Midday: Strong triple-digit losses have quickly developed in lean hog trade Thursday morning. The concern that additional pressure will develop in pork values and cash markets could lead to further losses late in the week.
Moderate to strong pressure is seen through the entire livestock market as cattle traders try to adjust positions following the strong growth seen over the last couple of weeks. Hog markets on the other hand are focusing more on fundamental pressure with most contracts holding triple-digit losses at midday.
Corn prices are lower in light trade. May corn futures are 1 cent lower. Stock markets are higher in light trade. The Dow Jones is 80 points higher while Nasdaq is up 15 points.
Live cattle futures have quickly pulled back from the trend of posting triple-digit gains. Even though markets are lower, the firmer market trend still is holding as traders appear to be taking positions. This has limited selling to 50 to 70 cents per cwt through most of the morning as current market prices are likely to hold through the end of the session.
Cash cattle activity remains sluggish early Thursday morning with bids of $212 to $215 redeveloping in the North. So far, trade is undeveloped with feedlot managers holding firm to asking prices. This could push trade into the day Friday. Asking prices remain at $132 and higher in the South and $217 to $218 in the North even with the moderate pullback in futures trade.
Beef cut-outs at midday are mixed, $0.75 higher (select) and down $1.00 per cwt (choice) with active movement of 103 total loads reported (54 loads of choice cuts, 29 loads of select cuts, 4 loads of trimmings, 15 loads of ground beef).
Moderate pressure has quickly developed through feeder cattle futures Thursday morning. The pullback in trader activity is more focused on the desired need for a market correction following the rocket-like trend the feeder cattle chart has taken over the last two weeks than any change in market fundamentals. March futures remain lightly trade and holds a narrow loss, while the rest of the complex is trading 20 to 80 cents lower.
Nearby lean hog futures appear to be testing support levels following the latest round of market pressure seen Thursday morning. May through April 2018 contracts are holding triple-digit losses with traders focusing on recent pressure in cash markets while pork values continue to erode.
The aggressive availability of pork on the market may continue to limit overall market support in all areas of the complex, and could lead to further market pressure. April contracts remain lightly traded with losses contained to 25 cents per cwt.
But June futures are posting a $1.47 per cwt loss, trading at $74.27 per cwt. This has broken through the December 2016 low, and could spark additional losses if markets close at this level.
Cash prices are unavailable on the National Direct morning cash hog report.
Cash prices are unavailable on the Iowa Minnesota Direct morning cash hog report.
The National Pork Plant Report reported 184 loads selling with prices falling $1.21 per cwt. Lean hog index for 3/21 is at $71.41 down $0.07 with a projected two-day index of $71.29 down $0.12.