Limited trade is seen early Monday in all livestock trade. Firm follow through support is quickly developing across the lean hog complex with most contracts firmly higher. Pressure is seen in cattle trade, but the pullback following sharp triple-digit gains Friday is viewed as a market correction with traders squaring positions. Corn markets are higher in light trade activity. September corn futures are 3/4 cent higher. Stock markets are mixed in light trade. The Dow Jones is 69 points higher while Nasdaq is up 33 points.
Light to moderate price pressure has continued to hold through the morning, although following the strong market rally that developed last week, traders are still viewing this market pullback as a light correction. Trade volume is sluggish through the morning Monday with losses hovering from 30 to 60 cents per cwt. It is possible that additional volume may step back into the market, but traders are unlikely to change price direction before the end of the day. Cash cattle interest is undeveloped Monday with bids and asking prices still undeveloped. This is likely to limit overall interest until midweek, and potentially push trade off until the end of the week once again. With prices mixed, higher in the South and lower in the North last week, packers and feedlot managers continue to focus on longer term direction. Boxed Beef cut-outs at midday are higher, $0.80 higher (select) and up $0.90 per cwt (choice) with light movement of 46 total loads reported (21 loads of choice cuts, 13 loads of select cuts, 7 loads of trimmings, 6 loads of ground beef).
Moderate losses which moved into the market at opening bell Monday morning have continued to hold as traders focus on very limited market activity early in the week, and are adjusting to aggressive triple-digit gains seen late last week. Even though the overall tone of the market remains firm, the focus on increased follow-through buyer interest has been limited due to overall outside market shifts, which is limiting the ability to bring buyers back to the complex. Prices appear to be holding in the current trading range with losses of 30 to 50 cents seen in most contracts.
Trade has stabilized through the morning with front-month August futures still holding moderate losses of 80 cents per cwt due to very limited volume and most trade interest moving to the October and December contracts. Follow through support has been seen through the rest of the complex with gains 10 to 60 cents higher, although most contracts are pushing prices 40 to 50 cents higher in light activity. The longer-term market support may be starting to build, as traders try to establish short-term support levels through the week. Cash prices are unreported due to confidentiality on the National Direct morning cash hog report. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $1.33 at $56.30 per cwt with the range from $55.00 to $57.50 on 586 head reported sold. The National Pork Plant Report posted 98 loads selling with carcass values gaining $1.45 per cwt. Lean hog index for 8/2 is at $67.57 down 1.34 with a projected two-day index of $66.04, down 1.53.
Rick Kment can be reached at firstname.lastname@example.org
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