Harold House with the Kansas City Trade Group explains that the market is quiet at this time but will more than likely re-act violently after this morning’s Crop Production report from the USDA.  Click below to hear KMZU’s Mandy Young talk with Harold House from the Kansas City Trade Group.

6-12 0830 Harold House

Early Livestock:

Early support is expected to redevelop through both the live cattle and lean hog futures market. The building firmness in pork values and cash hog movement is helping to drive fundamental support once again.

Cattle:     Cash: Steady-$1 Lower     Futures: 10-50 Higher  Live Equiv.  $137.57  + $0.07

The mood through the cash cattle market is virtually unchanged with a few token bids developing on Tuesday around $120 in the South. This may help to spark renewed bidder interest at midweek, but the focus on the USDA report may keep attention on the grain complex through much of the day. Asking prices keep the attention on the grain complex through much of the day. Asking prices are likely to be restated around $124 in the South and $200-plus in the North. Significant trade volume could easily be delayed until Thursday or Friday. Live and feeder contracts should open moderately higher, with both technical support and follow through buying after the triple-digit rally on Tuesday.

Hogs:       Cash:  Steady-$1 Higher  Futures: 50-70 Higher   Lean Equiv.  $106.60 + $1.38

There’s expected to be additional aggressive buyer support through the middle of the week in the cash markets. Packers continue to focus on the need to gain access to hogs, and so far has been willing to pay extra to get that access. But it’s uncertain just how far into their pockets they will go at this point in the game. Overall early cash bids are expected to be all over the place, but will likely end the day higher. Lean futures are focusing on follow-through buyer support, with light to moderate gains seen in overnight trade.

Early Grains:

Traders seemed to move to the sidelines as the overnight session progressed, leaving most contracts to drift quietly ahead of Wednesday’s round of USDA Crop Production and Supply and Demand reports.

Outside Markets:

It’s interesting to note that outside commodities were relatively quiet with metals and energies both mixed. The Dow Jones Industrial Average closed 116.57 points lower Tuesday at 15,122.02. The overnight session saw the Dow Jones futures trade 42-points higher, indicating U.S. stocks could see renewed buying interest early Wednesday. The overnight crude oil market was $0.04 higher at $95.43 while Brent crude was $0.23 higher at $103.19. The August gold contract lost $1.70 to close at $1,375.30, while the U.S. dollar index lost 0.080 at 81.193. Soybeans at the Dalian Exchange were still closed while Malaysian palm oil contracts were lower.