Cash cattle interest is undeveloped late Tuesday with bids and asking prices generally not established at this point. The overall lack of direction in futures trade Tuesday has allowed both sides of the market to sit on the sideline and wait for more information midweek. It is likely that active trade may develop Thursday or Friday. According to the closing report, the national hog base is $0.64 lower compared with the Prior Day settlement ($37-$40, weighted average $39.54). Corn futures are lower in light activity, with September futures 2 cents lower Tuesday. The Dow Jones Index is 98 points higher with the Nasdaq up 43 points.
Light trade was seen in all live cattle markets with prices mixed in a narrow-to-moderate range. The early morning support seemed to ease as pressure in late 2019 contracts seemed to weaken the tone of the entire complex. Futures closed $0.55 lower to $0.20 higher. Narrow gains held through 2018 contracts with August futures posting a 20-cent-per-hudredweight gain. The lack of support through deferred contracts seemed to focus on the overall weakness seen in summer 2019 contract months. Firm fundamental support is likely to draw additional interest through the next couple of weeks. Beef cut-outs: mixed, $1.79 higher (select, $204.08) to down $0.41 (choice, $213.57) with light demand and offerings (72 loads of choice cuts, 20 loads of select cuts, 5 load of trimmings, 14 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL:
Steady. Early activity Wednesday is expected to remain muted with bids and asking prices unavailable through the first couple of days of the week. Packers are expected to float initial token bids through the day Wednesday, although trade is not likely to develop until later in the week.
Light pressure developed across feeder cattle trade following mixed market movements through most of the session ($0.10 to $0.47 lower). Limited direction was seen through the entire cattle complex as light buying slowly stepped back into the market early Tuesday. But this market support was too thin to hold through the end of the session. But even though pressure developed Tuesday afternoon, the market still remains stuck in the sideways trading pattern seen over the last couple of weeks. This could limit a break below support levels during late August based on still-firm fundamental seasonal support likely to hold through the complex. CME cash feeder index for 8/20 is $149.43, down $0.23.
Light-to-moderate buyer support moved into most lean hog trade with prices hovering in a widely mixed trading range ($0.32 lower to $1.07 higher). The sharp losses that developed Monday were focused on adjusting price levels following the strong $8- to $10-per-cwt rally over the last couple of weeks. This correction seems to have kept most traders content as buying slowly moved back into the market. Nearby contracts held narrow losses, while strong gains quickly developed in early 2019 contract months. Pork values have eroded with most primals shifting lower. Pork cut-out: $66.19, down $0.99. CME cash lean index for 8/17: $51.51, down $1.43. DTN Projected lean index for 8/20: $50.71, down $0.80.
WEDNESDAY'S CASH HOG CALL:
Steady to $2 lower. Stability in futures trade seems to be bringing more focus on the overall ability to keep cash markets even to slightly lower midweek. Most bids are expected to be steady to 50 cents per cwt lower. Wednesday runs are expected at 465,000 head with 209,000 head expected Saturday.
Rick Kment can be reached at email@example.com
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