GENERAL COMMENTS
The cash cattle trade was a nonevent Friday thanks to relatively larger trade volume generated near midweek. The national hog base closed off $0.03 compared with the prior day settlement ($49-$54.03, weighted average $53.96). From Friday to Friday, livestock futures scored the following changes: Apr LC off $5.20; Jun LC off $5.55; Mar FC off $4.27; May FC off $3.65; Apr LH off $7.03; May LH off $7.53. Corn futures closed a penny-plus higher, successfully recovering from early trade war worries and somewhat supported by lower estimates of the Argentine corn crop. The stock market continued to react negatively to trade war rhetoric and fears of the slowing economy. The Dow slumped another 424 points lower with the Nasdaq off 174.
LIVE CATTLE
Futures closed moderately to sharply lower, off 32 to 220. Spring and summer contracts were really clobbered Friday, falling to levels not seen since the lows of third-quarter 2017. Selling pressure was tied to aggressive long liquidation, technical-selling and trade war uncertainties. The March 1 on-feed report turned out to be neutral to somewhat negative: on feed 109%; placed in February 107%; and marketed in February 102%. Note that the February placement turned out to be several percentage points larger than the average trade guess. Beef cutouts: lower (choice, $223.09 off $2.12, select $216.40 off $1.62) on light-to-moderate demand and moderate offerings (48 loads of choice cuts, 28 loads of select cuts, 06 loads of trimmings, 27 loads of coarse grinds).
MONDAY'S CASH CATTLE CALL:
Lower. Monday's activity in the cash cattle trade will be limited to the collection of new showlists. Given the discouraging way futures closed on Friday, it is a good bet both bids and asking prices will start out lower next week.
FEEDER CATTLE:
Futures closed sharply lower, off 122 to 195. Logically, feeders followed the same bearish path seen in the live market. As deferred live futures erode, and feedlot margins narrow, commercials seem to be very reluctant to commit in terms of replacement costs. CME cash feeder index: 03/22: $137.98, off $1.41.
LEAN HOGS:
Futures closed mostly sharply lower, off 47 to 292. Although the Chinese decision to raise tariffs on U.S. pork by 25% will not become official until March 21, fear of the inevitable drove lean contracts sharply lower for the second consecutive day. Nearby April and June ended the week by setting new contract lows. The March 1 USDA Hogs and Pigs report will be released next Thursday and the trade expects to see further evidence of herd expansion. That is not exactly the news traders want to hear given the current stage of market free fall. Pork cutout: $70.74 (FOB plant) unchanged. CME cash lean 03/21: $63.03, off $0.60 (DTN Projected lean index for 03/22: $62.32, off $0.71.
MONDAY'S CASH HOG CALL:
Steady to $1 lower. Hog buyers will resume work on Monday still in a defensive frame of mind.
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