Strong price support has moved into cattle and hog futures with triple-digit gains developing in all markets. The shift from previously lower price levels has not totally eroded the weaker tone of the market, but a strong market close Wednesday may spark underlying buyer activity to move back into the complex. Corn prices are lower in light trade. May corn futures are 1 cent lower. Stock markets are higher in light trade. The Dow Jones is 203 points higher while Nasdaq is up 15 points.
LIVE CATTLE:
The aggressive price shifts higher in feeder cattle trade have helped to spark increased buyer support in live cattle markets Wednesday morning. This is pushing nearby contracts 90 cents to $1.20 per cwt higher at midday based on the expectation that additional buyer support will move into the market over the near future. Previous price erosion that developed near closing bell continues to be a concern once again as traders remain cautious as to just how much buyer support remains in the market. Trade volume is likely to remain sluggish through the rest of the week, with trade closed Friday due to the Good Friday holiday, and many traders are cutting out early due to this lack of activity. Cash cattle activity is undeveloped with live bids redeveloping, mostly across the South, at $120 to $121 per cwt. Current asking prices are seen at $125 to $126 per cwt live and $201 and higher dressed. It is likely that interest will improve through midday and could develop in cash trade by the end of the day given the support in futures trade. Although the speed of cash trade is hard to pinpoint, leaving some activity for Thursday or later. The Fed Cattle Exchange Auction today listed a total of 409 head, with 0 actually sold, 177 head listed as unsold, and 232 head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 232 total head, with 0 head sold, 0 head unsold, 232 head listed as PO ($120.00-121.00); NE -- no cattle reported; TX 177 total head, with 0 head sold, 177 head unsold, and 0 head listed as PO; CO -- no cattle reported; IA -- no cattle reported; other states (OK, SD, MN) -- no cattle reported. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 409 head total, 0 head sold; 1-17 day delivery -- no cattle reported; 10-17 day delivery -- no cattle reported; 17-30 day delivery -- no cattle reported. Boxed Beef cut-outs at midday are lower, $2.06 lower (select) and down $0.34 per cwt (choice) with light movement of 79 total loads reported (45 loads of choice cuts, 21 loads of select cuts, 5 loads of trimmings, 8 loads of ground beef).
FEEDER CATTLE:
Sharp gains have quickly developed across the complex. This is adding to the underlying support in all livestock markets. March feeder cattle futures remain lightly traded and generally stable, as most open interest has moved to the April and May contracts. April and May futures are also leading the price surge Wednesday morning, pushing prices $2 to $2.50 per cwt higher. There is growing support that may continue to develop across the complex, although firm momentum during the week could spark long-term buyer interest not only the rest of this week, but well into April.
LEAN HOGS:
With the exception of front-month April contracts, which are holding a 60-cent-per-cwt loss, the rest of nearby contracts have accumulated active buyer support back to the complex. This is adding even more support to the market with June futures leading the complex higher with a $2 per cwt rally. There is still concerns about the ability to hold midday gains through the end of the session, as prices have eroded in the recent days following a strong early rally. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.49 at $49.62 per cwt with the range from $45.00 to $50.50 on 4,127 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $0.03 at $49.87 per cwt with the range from $45.00 to $50.50 on 1,297 head reported sold. The National Pork Plant Report posted 187 loads selling with carcass values slipping $0.28 per cwt. Lean hog index for 3/26 is at $60.58, down 0.77 with a projected two-day index of $59.85, down 0.73.
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