Lean hogs were hit hard again, but have regained prices from initial limit down. Only May is contracts post double-digit gains. The impact of a potential increase of tariffs on China rippled through the hog market. Corn futures are 2 cents higher uncovering some buying interest as attention turns back to weather. The Dow is down 415 points while the NASDAQ is down 138 points.
Live cattle are showing green on the screen as some traders are finally getting out of short positions unwilling to press the market further. Long-term support has held, giving some confidence to bottom-pickers. June continues to struggle as it remains close to cash for last week holds to see how that will unfold this week as business picks up later in the week. Boxed beef cut-outs at midday are lower, down $0.98 for choice and down $0.06 for select. Movement is good at 94 loads (50 loads of choice cuts, 21 loads of select cuts, 7 loads of trimmings, and 15 loads of ground beef).
Futures post triple-digit gains so far posting an inside trading day. Futures will have a lot of work to do to turn traders more aggressive on the buy side. The market may be correcting with a price retracement on the way. Upside may be limited based on the strength of live cattle futures.
After trading nearly limit down again at the beginning of the day, futures have made a dramatic comeback with contracts trading slight higher at time of this writing. Long liquidation may have run its course taking pressure off the market. So hope may have returned that the increased tariffs will not go into effect due to the delegation from China on their way over for further talks. The National Daily Direct morning cash report showed a weighted average price $0.30 lower with a range from $72.00 to $81.50 on 5,532 head reported sold. The National Pork Plant report posted 182 loads selling. There were 171 loads of pork cuts and 11 loads of trim/process pork. Pork carcass values increased $3.33 per cwt at $86.22 per cwt. The lean hog index for 5.3 is $82.81, down $0.21 with a projected two-day index for $82.63, down $0.19.
Robin Schmahl can be reached at: firstname.lastname@example.org
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