Triple-digit gains seen early Tuesday morning have eroded through the session, although the tone of the market remains firm with limited gains holding across the complex. Markets are expected to hold prices in current ranges through the rest of Tuesday.
Narrow gains are seen in most live cattle and lean hog futures trade midday Tuesday as traders back away from initial support. The focus has moved to potential market stability through the week. This may spark some additional underlying gains over through the end of the week, although afternoon trade is expected to remain sluggish.
Corn futures are lower in moderate trade. July corn futures are 7 cents lower. Stock markets are higher in light trade. Dow Jones is 360 points higher with NASDAQ up 121 points.
Initial gains have slowly eroded through the morning as traders try to balance the recent market support with longer-term market direction as nearby contracts are hovering in a narrowly mixed trading range. The overall lack of support in the complex has more to do with trader apathy midday Tuesday than any fundamental or technical market shifts.
June and August futures have trickled to narrow losses, although the underlying tone of the market seems to be firming based on traders defending recent support levels and focusing on long-term demand support through the entire beef complex. Bids have quickly developed Tuesday morning at $109 live and $175 per cwt dressed.
This is well below asking prices of $112 to $115 live and $185 and higher dressed. At this point there seems very little urgency in getting deals done, which will likely push actual trade off until Wednesday or later.
Boxed Beef cut-outs at midday are mixed, $0.49 higher (select) and down $0.03 per cwt (choice) with light movement of 69 total loads reported (30 loads of choice cuts, 19 loads of select cuts, 4 loads of trimmings, 16 loads of ground beef).
Active buyer support quickly moved into feeder cattle trade early Tuesday morning, as the focus on corn price stability helped to solidify recent gains. Prices have eased through the morning, but buyers remain firmly focused on building long-term market support based on potential stability in feed costs.
August through November contracts are all trading at $137 per cwt, eliminating any sense of price premium in nearby contract months. The flat market structure is creating some concern that could allow increased market interest in fourth-quarter trade without price penalty and limited volume in summer and fall contract months.
Mixed trade is seen late morning Tuesday following initial strong gains slipping away during morning trade. July and August futures have posted moderate to firm losses at midday with lightly traded July contracts leading the renewed weakness with a 97-cent loss.
Although deferred futures are holding moderate support, gains are limited to 20 to 40 cents per cwt. The fact that renewed buying interest is being limited is causing concern that additional softness may develop through the rest of the week.
Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $1.37 at $74.77 per cwt with the range from $67 to $76 on 2,815 head reported sold.
Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report.
Pork values posted strong gains as aggressive gains in belly cuts offset triple digit losses in rib primals. Pork cutouts added $1.64 per cwt at $84.61 per cwt with 216 loads traded. Lean hog index for 6/14 is $79.27, down 0.16, with a projected two-day index is unavailable due to delays.