Feeder cattle futures have shifted lower Friday morning as traders are taking into account a rally in the corn trade. This sparked triple-digit losses in most cattle futures.
Hog trade has found short-term stability after falling over $14 per cwt in just over a week. This created an oversold market structure despite the continued weak market trend. Cattle futures are under moderate-to-strong pressure at midday with traders focusing on triple-digit losses in feeder cattle. Renewed late-week gains in corn prices sparked cattle market liquidation.
Corn futures are higher in light trade with September up 3 3/4 cents. Stock markets are lower in light trade with the Dow down 186 points and the NASDAQ down 108 points.
Live cattle futures have suffered significant losses late morning with deferred contracts leading the complex lower. Losses of $3 per cwt or more in feeder cattle have quickly weakened any buyer support that trickled into the live cattle trade over the last couple of days.
Although moderate gains in corn prices at the end of the week will not significantly increase feed costs, especially following the grain market pressure during the week, traders remain extremely concerned about any wide market shifts in the complex. Some widespread market swings could be seen early next week as traders grapple with longer-term market direction.
Cash sales are being reported in several areas of the North at $114.50 per cwt live basis. This is generally steady with last week’s average. Bids are seen in all other areas consistent with trade earlier in the week. This could allow light-to-moderate cash trade to develop through the end of the day.
But, at this point, prices are not likely to deviate significantly from earlier trade levels. Asking prices remain at $112 to $113 live basis in the South and $185 and higher dressed.
Boxed beef cutouts at midday are higher, up $1.58 (select) to up $0.72 per cwt (choice) with light movement of 59 total loads reported (20 loads of choice cuts, 30 loads of select cuts, no loads of trimmings, 9 loads of ground beef).
Pressure was seen in feeder cattle futures Friday morning following gains in the corn trade. The inability of buyers to move into feeder cattle futures through early August has created pressure through the entire complex. The Spot September futures contract has tumbled nearly $6 per cwt in the last three trading sessions. This is not only creating increased volatility, but has quickly changed the direction of market trend as prices hovered at summer highs early in the week, but are now testing July lows.
Lean hog futures have gyrated higher and lower in a moderate-to-wide range Friday as uncertainty surrounding support in the complex and recent losses sparked a combination of late-week short-covering and follow-through pressure. The lack of direction is expected to continue in the lean hog trade through the rest of the session, but this is not expected to break futures out of the bearish slide they have seen over the past week.
Cash prices are lower on the National Direct morning cash hog report. The weighted average price is $1.04 lower at $76.95 per cwt with the range from $68 to $84.50 on 4,976 head reported sold.
Pork values weakened following triple-digit losses in ham and belly cuts in active trade. Pork cutouts fell $0.98 per cwt at $86.81 per cwt with 238 loads traded. Lean hog index for 7/31 is $84.11, up $0.71, with a projected two-day index is $84.64, up $0.53.