Lean hog futures have posted a strong rally early Tuesday morning as traders try to adjust to the recent market lows set last week. Cattle markets are mixed in light trade as sluggish volume is likely to be seen through the rest of the day.
Cattle futures remain focused on long-term direction through the complex with firming support seen in feeder cattle markets during late morning. Hog futures are bouncing higher with triple-digit gains holding in most contracts.
Corn prices are mixed in light trade. March corn futures are steady Tuesday. Stock markets are mixed in light trade. The Dow Jones is 97 points lower while Nasdaq is up 52 points.
Narrow trading ranges have continued to develop Tuesday morning as traders trickle back into the market from the long weekend. Nearby contracts are holding narrow gains, but this being offset by narrow losses in deferred contracts. There is growing stability in beef values, but it is uncertain if this will translate to increased buyer support in the nearby futures trade during the week.
Cash cattle activity remains undeveloped through the complex with bids and asking prices are still undeveloped. It may be the second half of the week before any significant developments are seen in the market. There are also some expectations that the strong rally last week will significantly increase asking prices and firm feedlot manager resolve.
Boxed beef cut-outs at midday are higher, $3.07 higher (select) and up $3.20 per cwt (choice) with light movement of 69 total loads reported (38 loads of choice cuts, 12 loads of select cuts, 7 loads of trimmings, 11 loads of ground beef).
Narrow trading ranges seen early in the session have widened as traders seem to have gained increased momentum following strong gains in boxed beef values. This has pushed front month March futures 90 cents per cwt higher as traders continue to focus on long term market support in all nearby contracts.
Strong gains have flooded into the lean hog futures complex. This is helping to sustain triple-digit gains in all markets. Additional support is likely to be seen through all the markets during the rest of the trading session with traders trying to take advantage of the aggressive losses seen last week.
Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.26 at $64.18 per cwt with the range from $63.00 to $64.50 on 6,339 head reported sold.
Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $0.30 at $64.29 per cwt with the range from $63.50 to $64.50 on 2,537 head reported sold.
The National Pork Plant Report posted 241 loads selling with carcass values adding $1.62 per cwt. Lean hog index for 2/16 is at $72.09, down 0.80 with a projected two-day index of $71.41, down 0.68.