Buying quickly moved back into the lean hog complex with nearby futures $2 to $2.70 per cwt higher through the morning. This is helping to spark movement back into the bearish complex.
Strong morning buying has flooded into hog trade as traders look at the report of potential ag exports to China once a trade deal is done. But there is no specific information available, allowing traders to speculate on future demand. This is posing $2 per cwt gains in all nearby contracts midday Thursday. Firm pressure is moving into cattle trade as traders square positions from early week gains.
Corn futures are higher in sluggish trade. March corn futures are 6 cents higher. Stock markets are lower in light trade. Dow Jones is 71 points lower with Nasdaq down 11 points.
Live cattle trade is slowly slipping lower as traders moved back into the hog complex, allowing for some nearby contract liquidation by noncommercial traders through the morning. This is holding spring and summer trade 30 to 80 cents lower although trade remains very limited.
Cash markets have started to see increased packer involvement through the morning, although bids have done very little to improve as the week continues. Live bids are seen at $123 per cwt, while dressed bids of $198 per cwt. Asking prices are at $128 and higher live and $205 to $207 dressed. Active trade may still be pushed off until Friday with both sides not budging at this point.
Boxed Beef cut-outs at midday are higher, $0.12 higher (select) and up $1.58 per cwt (choice) with light movement of 61 total loads reported (31 loads of choice cuts, 13 loads of select cuts, no loads of trimmings, 17 loads of ground beef).
Firm pressure has moved through all cattle trade Thursday morning with increased market uncertainty developing through the entire complex. Following early week support, traders are slowly but steadily backing away from previous market support.
This may add to even more pressure late in the week. Nearby contracts are holding losses of $1 per cwt at midday, while limited softness seen in deferred contracts.
Buyer support is moving into the complex Thursday morning as reports that China will agree to purchase $30 million in ag products yearly. Although there is no indication as to what products will be involved and how much of each of these products, hog traders expect that pork will be a beneficiary of this deal.
This has pushed nearby contracts $2 to $2.67 per cwt higher at midday. The previous pressure in the market has left the market ripe for a market rally, which could lead to additional support even if trade deals are not revealed.
Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.34 at $46.56 per cwt with the range from $44.00 to $47.85 on 4,910 head reported sold.
Cash prices unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report.
Pork carcass values shifted higher following mixed primal values, with prices gaining $0.13 per cwt at $60.30 per cwt with 180 loads traded. Lean hog index for 2/19 is $54.13, down $0.30, with a projected two-day index is $54.06, down $0.07.