Mixed trade continued through Wednesday morning with light-to-moderate cattle gains offset by limited market erosion in lean hog trade. Hog futures are adjusting from sharp early week gains, but unable to give back the majority of earlier gains. Corn futures are lower in light morning trade with December down 3 3/4 cents. Stock markets are higher in active trade with the Dow up 240 points and the NASDAQ up 94 points.
Lackluster trade in live cattle has led to mixed prices in a narrow-to-moderate range at midday. Although limited losses continue in October and December futures, firmness in 2020 contract months is helping to rekindle long-term buyer support.
Traders still are not able to shake the bearish tone established by weak spot-month futures as prices remain under $100 per cwt and have been hesitant to draw active buying interest given the overall demand uncertainty and pressure in cash trade. Cash cattle markets remain generally quiet with a few bids trickling into Nebraska at $107 live basis and $168 dressed. Asking prices are seen at $105 live in the South and $168 dressed in the North.
The extremely wide gap between asking prices and limited bids points to another intensive push by packers to drive cash markets lower once again, although at this point, feeders are not expected to yield.
This is likely to push cash trade to late in the week. Boxed beef cutouts at midday are mixed, down $1.78 (select) to up $1.06 (choice) with light movement of 79 total loads reported (28 loads of choice cuts, 23 loads of select cuts, 16 loads of trimmings, 12 loads of ground beef).
Increased stability is seen in feeder cattle trade Wednesday morning as traders continue to focus on the support moving into the complex. Firm pressure in corn trade is lowering production costs, helping to spark additional support in feeder cattle prices.
Traders are also starting to look for additional technical signals as prices move to the top end of the recent sideways market range. A move above $136.50 per cwt in September futures would likely spark additional buyer support, opening the door to additional market gaps over the next couple of weeks.
Limited-to-moderate pressure is holding in lean hog futures Wednesday morning, as traders continue to adjust to the aggressive shift higher Tuesday.
The underlying firmness in the complex continues to hold, although traders are trying to focus on a more realistic market range following continued pressure in cash hog trade and lackluster support in pork values. October futures have pulled back from morning gains, with a 15-cent loss holding at midday.
Other nearby contracts are holding $1-per-cwt losses, although very limited volume is seen during most morning trade. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.92 at $54.34 per cwt with the range from $49 to $55.00 on 4,504 head reported sold. Pork values fell slightly following recent wide market swings.
Pork cutouts slipped $0.11 per cwt at $74.49 per cwt with 163 loads traded. Lean hog index for 8/30 is $67.97, down $1.48, with a projected two-day index is unreported at this time.
Rick Kment can be reached at email@example.com