Harold House with the Kansas City Trade Group suggests it will be a quiet day in the markets Wednesday. Click below to hear more on the markets from KMZU’s Mandy Young and Harold House from the Kansas City Trade Group.
The lean hog board should open moderately higher, supported by surging carcass value and the large premium of the cash index. Cattle futures are likely to start out mixed as tarders slowly position ahead of late-week cash and on-feed news.
Cattle: Cash: Steady-$2 Lower Futures: mixed Live Equiv. $136.67 – $0.24
Market watchers could see a few preliminary cattle bids tossed out midweek, but we assume that buying interest in general will be no better than lightly scattered. Though packers may be short bought, the strategy of late-week shopping has proven fairly successful since Memorial Day, and they’re likely to stay with a winner. Nominal asking prices should be restated $3-4 over spot June. Live and feeder commercials, position ahead of late week news.
Hogs: Cash: Steady-$0.50 Higher Futures: Mixed Lean Equiv. $112.32 + $0.50
Look for the cash hog market to open with firm prices Wednesday morning thanks to limited country movement since last Friday and very attractive packer margins. Regarding the latter, the port cut-out closed Tuesday night $7.62 above the weighted average Iowa, based on dressed barrows and gilts, the best profit incentive seen in months. Lean futures are geared to open moderately higher thanks to further evidence of strong, early summer pork demand.
Grains are mixed early Wednesday after quiet trading overnight. The latest seven-day forecast expects 1 ½ to 2 ½ inches of rain over Iowa, Minnesota, and Wisconsin starting Thursday, not good news for producers waiting to plant soybeans.
Crude oil and gold are steady to higher with EIA crude oil inventory data at 9:30 a.m. CDT and Wednesday’s Federal Reserve Statement at 1 p.m. The Dow Jones Industrial Average closed 138.38 points higher Tuesday at 15,318.23. The overnight session saw the Dow Jones futures trade 16-points higher early Wednesday, indicating higher prices for U.S. stocks later in the morning. The overnight crude oil market was $0.45 higher at $99.12 while Brent crude was $0.47 higher at $106.49. The August gold contract gained $0.60 to close at $1,367.50 while the U.S. dollar index was 0.06 higher at 80.81. Soybeans at the Dalian Exchange were lower while Malaysian palm oil contracts were modestly higher.