Strong follow-through buying is seen through lean hog trade with traders still focusing on strong underlying demand in domestic and export markets despite the uncertainty of trade agreements with China. Corn futures are higher in active trade. July corn futures are 6 cents higher. Stock markets are higher in light trade. Dow Jones is 126 points higher with Nasdaq up 75 points.
Light to moderate buying redeveloped Wednesday morning as traders are focusing on increased underlying support moving into the complex. This is helping to add increased interest following very little new market news through the complex. Uniform market gains are seen in live cattle trade with prices 25 to 50 cents per cwt higher at midday. This is likely to create additional underlying support through the entire cattle complex which should spark some additional buyer interest through the rest of the week. Cash cattle trade is starting to develop in the South with light sales seen in Kansas and Texas at $117 per cwt. This is $3 per cwt lower than last week, and represents additional pressure seen in the cattle market. Bids are seen in Nebraska at $185 to $186 dressed. Asking prices are still at $120 and higher live and $196 and higher dressed. Boxed Beef cut-outs at midday are mixed, $0.50 lower (select) and up $0.41 per cwt (choice) with light movement of 78 total loads reported (38 loads of choice cuts, 19 loads of select cuts, 15 loads of trimmings, 9 loads of ground beef).
Price moves in the feeder cattle complex have bounced higher and lower through the morning with very little new market direction developing across the complex. Nearby contracts, remain firmly higher with gains of 40 to 60 cents seen across the complex while selling is slowly creeping back into deferred trade. The underlying tone remains weak in all cattle trade, but prices are at a level where it is going to be hard to convince traders to actively sell into this already depressed market.
Strong underlying support developed through the lean hog complex through morning trade with triple digit gains holding in June through August futures. June futures are leading the complex higher with a $1.72 per cwt rally, which is pushing prices near $91 per cwt through late morning. The underlying support through the complex is based on long term demand support for pork, given the global need to replace supplies lost by African Swine Fever. This could continue to keep markets firm through the next several months, although underlying trade war is likely to keep markets unsettled through the near future. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.14 per cwt at $81.87 per cwt with the range from $72.00 to $85.00, on 5,170 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price added $0.61 per cwt at $83.03 per cwt with the range from $72.00 to $85.00, on 3,105 head reported sold. Pork values posted strong gains following a $12.25 per cwt rally in belly cuts. Pork cutouts added $1.28 per cwt at $89.92 per cwt with 196 loads traded. Lean hog index for 5/133 is $83.27 up 0.23, with a projected two-day index $83.67 up 0.40.
Rick Kment can be reached at email@example.com
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