GENERAL COMMENTS:
Moderate to firm losses developed through the entire livestock market as traders continue to focus on building pressure in nearby live cattle and feeder cattle contracts. This is adding to uncertainty in the complex with fundamental softness seen in all meat values during early April. Corn prices are higher in light trade. May corn futures are 3/4 cent higher. Stock markets are higher in light trade. The Dow Jones is 145 points higher while Nasdaq is up 32 points.
LIVE CATTLE:
Light to moderate pressure is seen across live cattle trade Wednesday morning with the focus on apathy in cash market movement and mixed trade through cutout values. Strong pressure in feeder cattle futures continues to be the main driver in front month losses in April live cattle pressure as traders continue to focus on the lack of commercial market support heading into the spring and summer season. The potential that additional cash market pressure may quickly develop in the weeks ahead may further weaken futures trade, leaving the entire market vulnerable. Cash cattle markets went untraded on the Fed Cattle Exchange Wednesday morning. The Fed Cattle Exchange Auction report today listed a total of 3,572 head for offer, none of which actually sold. I believe this is the first time since the Fed Cattle Exchange has traded that all cattle on the exchange have remained a "no-sale," indicating that there is a clear distinction between the direction of packers' and feeders' market intentions at this point. Bids are starting to be seen in Nebraska and Kansas on a live basis at $122 to $124, but this is well below asking prices of $130 per cwt. Asking prices on dressed cattle are still seen at $210 per cwt. Active trade may be seen at the end of the week. Beef cut-outs at midday are mixed, $0.28 higher (select) and down $1.44 per cwt (choice) with active movement of 100 total loads reported (70 loads of choice cuts, 14 loads of select cuts, 5 loads of trimmings, 12 loads of ground beef).
FEEDER CATTLE:
Sharp triple-digit losses continue to hold in front-month April futures. This has now pushed April feeder cattle contracts below $130 per cwt for the first time in two weeks. The lack of support in the complex and retraction of the strong market rally continues to limit trader support through the entire cattle complex, but especially the feeder cattle market during early April. The rest of the feeder cattle market continues to casually follow the direction set by April contracts at this point, with very little change in this activity expected over the near future.
LEAN HOGS:
Light buyer support is slowly stepping back into nearby lean hog futures contracts at midday as stability through the morning has gotten its point across to the entire complex and seemingly brought additional commercial interest back to summer markets. Although prices may be able to move slightly higher, it is uncertain just how much additional price support may be able to move into the contracts at this point given the still weak fundamental pressure in the market. But the fact that lean hog prices are not on a fast track lower is creating some underlying support to the market and helping to bring buyers to the table. Cash prices are lower at midday on the National Direct morning cash hog report. The weighted average price fell $1.35 at $58.64 per cwt with the range from $55.00 to $60.50 on 3,020 head reported sold. The weighted average price fell $0.36 at $60.18 per cwt with the range from $56.00 to $60.50 on 250 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 187 loads selling with prices falling $0.28 per cwt. Lean hog index for 4/3 is at $67.07 down $0.52 with a projected two-day index of $66.60 down $0.47.
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