Hog futures continue to lead the complex lower despite gains in spot-month trade. This has further eroded live cattle trade due to limited market direction through the entire complex. Corn futures are lower in sluggish trade. May corn futures are 4 cents lower. Stock markets are lower in light trade. Dow Jones is 203 points lower with Nasdaq up 42 points.
LIVE CATTLE:
Firm pressure has moved back into live cattle trade. April futures have posted a 42-cent loss, falling to $126.46 through the morning. This has fallen below short-term support levels seen in early March, and could signal additional liquidation as traders continue to ratchet prices lower through the end of the month. The inability to show consistent support in beef values is adding to the overall pressure in all contracts, which are trading 30 to 80 cents lower in limited activity. Cash-markets trade shocked the market with light to moderate trade developing across the South. Live trade is seen at $126 per cwt, and was a surprise given that both sides seemed to be resigned to waiting until Friday before active trade developed over the past several weeks. This trade is generally $2 per cwt lower than last week. It is uncertain how many more bids will be seen at these levels, given the eagerness for feedlot managers to sell. This could leave more volatility through the end of the week. Bids of $205 are seen in the North, but these prices are still well below $210 asking prices. Boxed Beef cut-outs at midday are mixed, $1.72 higher (select) and down $0.70 per cwt (choice) with light movement of 85 total loads reported (53 loads of choice cuts, 7 loads of select cuts, 5 loads of trimmings, 20 loads of ground beef).
FEEDER CATTLE:
Limited activity continues to develop through the feeder cattle complex following moderate price swings during morning activity. The underlying pressure in most outside markets and softness in live cattle trade is maintaining a generally weak hold on the entire complex. But summer contracts are starting to break away from this market pressure with narrow gains in May and August futures based on firm losses in grain trade, which lowers production costs. Direction is expected to remain limited through the entire complex allowing for increased uncertainty through the entire market.
LEAN HOGS:
Strong triple-digit losses have moved through summer contracts despite the ability for spot April contracts to sustain firm midday gains. Support in spot prices are focusing on the strength in cash markets through the week. The downturn in the market is not expected to create significant market pressure at this point, as traders focus on the potential for profit taking following the extended market surge over the last couple of weeks. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $0.14 at $73.19 per cwt with the range from $64.00 to $77.50, on 5,118 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $0.24 at $73.72 per cwt with the range from $64.00 to $77.50, on 2,244 head reported sold. Pork values continue to firm but are showing more stability in primal markets. Pork cutouts gained $0.98 per cwt at $82.05 per cwt with 181 loads traded. Lean hog index for 3/25 is $67.13, up $2.16, with a projected two-day index is $69.50, up $2.37.
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