Light-to-moderate gains have slowly but steadily developed in livestock futures Tuesday morning as traders break away from the weaker tone seen over the last week. Hog futures posted sharp losses early in the session, but have rebounded at midday.
Despite pressure in live cattle and feeder cattle futures during the first hour of trade, prices have stabilized at midday Tuesday. Hog futures, on the other hand, continue to tumble lower with traders focusing on weak cash markets and uncertain global demand potential for pork products. But despite early losses, hog futures are starting to show support at midday.
Corn futures are higher in light morning trade with December up 5 3/4 cents. Stock markets are lower in light trade with the Dow down 60 points and the NASDAQ down 59 points.
After testing long-term support near $94.30 per cwt in the October contract, buyers have moved back into the complex, pushing futures $1 to $2 per cwt higher at midday. The market remains oversold and should be able to continue to rally on current market fundamentals. But futures have struggled to hold on to gains at closing bell over the past week due to limited buyers.
Cash cattle activity remains quiet with both sides looking for direction from boxed beef market movement and activity on the futures trade. A few asking prices are seen in Nebraska at $168 to $170 per cwt dressed basis. A couple live bids in the North are reported at $100 per cwt, but in general, bids remain hard to find at this point. Most activity is expected to be delayed until Wednesday or later.
Boxed beef cutouts at midday are lower, down $0.28 (select) to down $0.63 (choice) with light movement of 64 total loads reported (34 loads of choice cuts, 21 loads of select cuts, 3 loads of trimmings, 6 loads of ground beef).
Gains quickly moved into feeder cattle futures Tuesday with prices surging $1 to $2 per cwt midday. Initial pressure was seen throughout the cattle trade, but selling stops evaporated, allowing for increased support. Triple-digit gains are likely to hold as traders view the current market as oversold.
Lean hog futures posted strong losses Tuesday morning, but have rebounded at midday. The December lean hog futures contract has traded in a $5-per-cwt range through the morning. The extreme pressure over the last two trading sessions has resulted in the complex being oversold. When markets are this volatile, it only takes a spark to shift market momentum, although at this point, fundamentals have not changed.
Trade issues with China and China’s movement in hog production will continue to make headlines over the near future, but prices may continue to shift in a wide range over the near future.
Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $1.36 at $49.49 per cwt with the range from $45 to $50.50 on 7,955 head reported sold.
Pork values rebounded following strong gains returning to rib and belly cuts. Pork cutouts added $1.25 per cwt at $73.16 per cwt with 240 loads traded. Lean hog index for 9/6 is $63.75, down $0.93, with a projected two-day index is $62.99, down $0.76.