Friday Morning Livestock Market Summary - Pressure Expected in Hog Trade

GENERAL COMMENTS:

Narrow trade ranges are expected early Friday morning as limited direction and the potential for renewed market stability move through live cattle trade. The focus will be on outside markets Friday with end-of-the-month and quarter positioning taking place among noncommercial traders. Cash cattle activity is expected to develop with light-to-moderate trade on Wednesday, but not enough activity for packers going into the month of April. The tone of the market is already set even as bids develop through the morning, but any trade that develops may not move significantly from early-week prices.

Sharp losses quickly and aggressively moved into lean hog trade Thursday, setting the stage for what could be another round of aggressive losses at the end of the month. Even if prices do tumble lower -- expanded trading limits will allow markets to fall $4.50 per cwt -- any technical reversal would still not be set in most contracts due to the aggressive market rally last week. Concerns about the ability to continue to move aggressive amounts of pork to China were hindered, following no sales in the export sales report. This is expected to be a major focus through the spring and summer months as traders look for any sign of increased demand. Cash hog values are expected once again steady to $1 per cwt higher with most bids steady per cwt higher Friday morning. Expected slaughter Friday is at 469,000 head. Saturday runs are expected at 146,000 head.

	BULL SIDE		BEAR SIDE
1)	Firm buyer support continues to develop in feeder cattle trade through the end of the month, helping to solidify additional commercial interest moving back into the complex.	1)	Moderate-to-strong pressure developed in beef values with traders starting to adjust values lower following the softness in futures trade and concern that short-term beef demand may struggle.
2)	Following the aggressive Midwest flooding and recent blizzards, more and more details are surfacing concerning the amount of cattle impacted through the storms. This is expected to help create underlying support through the overall complex.	2)	Pressure from outside markets is making it difficult to regain strong buyer support in all cattle trade. This could limit end-of-the-month price moves through the live cattle and feeder cattle trade.
3)	Cash hog values continue to shift higher following an aggressive double-digit rally the last couple of weeks. This firmness is expected to help bring some stability to the market despite volatile futures trade.	3)	Sharp limit losses developing through most nearby lean hog futures has resulted in continued market pressure. This could spark expanded trading limits, allowing for market losses to continue during early April.
4)	Farrowing intentions on the released hogs and pigs report is expected to slow through the summer months with projected intentions remaining steady with 2018 levels, compared to current levels 2% higher from year-ago levels, indicating the current expansion is slowing.	4)	The reaction to Thursday's export sales report and lack of pork sales to China appears to set a precedent that price could quickly and violently shift, depending on weekly sales numbers. Despite the shortsighted views in the market, the emotionally-charged complex could be driven by reported weekly sales numbers.

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