Lean hog and feeder cattle futures are down triple digits at midday as liquidation continues at the start of August. Despite hog futures pulling back from early session lows, the market continues to be bearish.
Pressure quickly developed through lean hog and feeder cattle trade Thursday morning. Early gains in live cattle trade have faded, although nearby futures still remain higher at midday. The swift shift lower in feeder cattle trade is limiting support through the entire cattle market.
Corn futures are lower in light trade with September down 3 3/4 cents. Stock markets are higher in light trade with the Dow Jones 242 points higher and the NASDAQ up 115 points.
Mixed trade continues Thursday as combined short-covering and early month buyer support is moving into the complex. Nearby contracts are holding on to triple-digit gains. But pressure in feeder cattle futures has increased weakness in deferred futures, leading to uncertainty about additional market shifts over the next few days.
Cash cattle bids have redeveloped in most areas with Southern live bids at $111 per cwt. Bids in the North are $115 live and $182 to $183 dressed. This may spark some additional support through the end of the week, as increased trade volume is likely needed in most areas. Asking prices remain at $113 live and $185 and higher dressed.
Boxed beef cutouts at midday are mixed, $0.26 lower (select) to up $0.67 per cwt (choice) with light movement of 56 total loads reported (25 loads of choice cuts, 17 loads of select cuts, 4 loads of trimmings, 9 loads of ground beef).
Continued pressure is seen in feeder cattle trade with most contracts down by triple digits. The early support in live cattle futures did little to stabilize the market as continued weakness is starting to develop in feeder cattle trade. Although futures have slightly pulled away from session lows, the underlying weakness seen in the market remains evident.
Losses in lean hog futures eased through the morning as initial pressure moving through long term resistance levels was unable to hold. August futures remain slightly higher as traders try to cover short positions, although other nearby futures are limited to $1 to $1.40 per cwt losses. The morning pressure pushed contracts more than $3 per cwt lower due to expanded trading limits, but the intensity seems to have slowed significantly as traders try to find a sense of market stability.
The July low of $68 per cwt in October futures continues to be the key support level. If prices are able to defend these levels over the next couple of days, it is likely that additional buyer support may trickle back into the complex.
Cash prices are lower on the National Direct morning cash hog report. The weighted average price is $2.37 lower at $78.02 per cwt with the range from $70 to $84.50 on 4,391 head reported sold.
Pork values firmed as steady support moved into several primal cuts. Pork cutouts added $2.02 per cwt at $89.57 per cwt with 105 loads traded. Lean hog index for 7/29 is $82.10, up $1.74, with a projected two-day index is $83.41, up $1.31.