GENERAL COMMENTS:
Livestock futures remain under pressure Monday as traders continue to focus on follow through weakness stepping back into the market Monday morning. Triple digit losses are developing in nearby feeder cattle contracts. This is leading to additional pressure in the live cattle trade at midday. Corn prices are higher in light trade. May corn futures are 6 cents higher. Stock markets are lower in light trade. The Dow Jones is 80 points lower while Nasdaq is down 25 points.
LIVE CATTLE:
April live cattle futures are leading live cattle futures lower with 75 cent losses as pressure has developed through the complex. The break away from $120 per cwt in front-month April contracts may be indicating that a market top has been established as traders step back from the market. Other contract months are tightly grouped in a narrow trading range from 35 to 50 cents per cwt with very narrow trading ranges seen through the complex. The very light market activity seen through the complex may keep livestock markets looking for additional activity through the rest of the session, but very little commercial interest may develop at this point. Cash cattle markets are quiet early in the week with show lists becoming larger early in the week. This is not unexpected given the relatively light trade seen last week. Bids and asking prices are undeveloped so far this week and may be quiet until midweek. Beef cut-outs at midday are lower, $1.65 lower (select) and down $0.11 per cwt (choice) with light movement of 57 total loads reported (26 loads of choice cuts, 18 loads of select cuts, 6 loads of trimmings, 8 loads of ground beef).
FEEDER CATTLE:
Triple-digit losses have replaced mixed nearby feeder cattle feeder cattle futures at midday with April through August contracts trading from $1 to $1.30 per cwt lower. The continued weakness in live cattle markets as well as firm support in corn prices during morning trade has put renewed pressure on feeder cattle prices. This may have put a seasonal top to the market which could caution commercial traders through the rest of the month. Sluggish trade is expected through the rest of the session, keeping trade levels light in most contract months.
LEAN HOGS:
Early mixed trade seen Monday morning has quickly eroded into moderate pressure as April futures have moved to a 60 cent loss, and faded to $65 per cwt while the rest of the complex is trading 35 to 70 cents lower based on additional losses in cash markets during early April and concerns that additional follow through pressure will continue to develop through the market. It is uncertain if April markets will be able to find stability around the $65 per cwt price level, but for now, there seems to be some support near this level with summer pork demand possibly being able to draw additional buyers back into the market. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.36 at $60.04 per cwt with the range from $59.87 to $62.00 on 2,870 head reported sold. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 155 loads selling with prices adding $0.51 per cwt. Lean hog index for 3/30 is at $67.59 down $0.71 with a projected two-day index of $67.59 down $0.71.
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