GENERAL COMMENTS: Strong triple-digit losses quickly developed in all livestock futures trade Monday. Lean hog futures posted aggressive nearby losses as summer contracts saw pressure of $2 per cwt or greater during the session. Concerns that recent gains may not be able to be sustained even with strong export demand is eroding buyer support. Cattle traders have adjusted positions following increased feedlot supplies in March. Corn futures are lower in light trade. May futures fell 3 3/4 cents per bushel. Dow Jones Index is 54 points lower with Nasdaq up 8 points.
CASH MARKETS: Cash cattle interest remained undeveloped Monday with packers and feedlot managers taking inventory and distributing showlists. The number of cattle offered for sale during the week is generally higher with Nebraska the only area where lower numbers are seen. Bids and asking prices are undeveloped and likely to remain that way until well into the week. National Daily Direct afternoon hog report is $2.21 lower with a weighted average of $78.73 per cwt. Full range of $73.00 to $76.46 per cwt on 5,170 head sold.
LIVE CATTLE: Sluggish trade left futures generally quiet ($0.10 lower to $1.60 higher). Moderate-to-strong price support moved into lightly traded April contracts, up $1.60 per cwt. The rest of the complex remained stuck in a narrow range with limited interest. There are likely to be some additional market shifts over the next few trading sessions as increased cattle on feed numbers may limit upward market support. But seasonal demand still is an underlying factor that may limit any long-term pressure. Total beef in cold storage fell 5% from February levels and 3% from year-ago levels, helping to return the focus on current demand. Beef cut-outs: higher, $2.15 higher (select, $222.64) and up $0.83 (choice, $234.48) with light demand and moderate offerings, 72 loads (28 loads of choice cuts, 27 loads of select cuts, 9 load of trimmings, 7 loads of coarse grinds).
TUESDAY'S CASH CATTLE CALL: Steady. Bids and asking prices are expected to remain undeveloped Tuesday morning with both sides likely to become more active at midweek. Showlists appear to be mostly larger with Nebraska the only area where smaller offerings are listed. Most trade is expected in the last half of the week, but Wednesday trade has become the trend lately, and could spark midweek movement.
FEEDER CATTLE: Firm post-report pressure posted triple-digit losses in most contracts ($0.72 to $1.42 lower). Feeder cattle futures contained light activity through most of the session, but active price pressure developed across the entire complex. Spot-month May fell 72 cents per cwt, the only contract not posting triple-digit losses Monday. Even though traders knew overall cattle supplies have continued to grow, the focus on higher placement numbers in March had a significant impact on the direction of the market and selling activity. Even with the most recent losses, prices remain in the top end of the trading range. Given the expected demand growth in the industry, it is likely strong prices will continue over the next few weeks. CME cash feeder index for 4/19 is $145.97 down $0.01.
LEAN HOGS: Sharp losses developed late Monday, eroding previous support ($0.05 to $2.97 lower). June futures led the lean hog futures lower, with prices falling $2.97 per cwt by the end of the session. This missed closing limit lower by just three cents per cwt, but still sparked uncertainty through the entire complex. There is growing uncertainty if recent market support can actually be sustained even if moderate-to-active trade develops from China. Part of the recent pressure is thought to be focused on trade positioning following the strong market rally over the last month, but there is growing uncertainty that even active exports can sustain the recent highs based on current production levels. June futures have pulled back $5 per cwt from contract highs set the first week of April, but this is still $15 to $20 per cwt above support levels seen in March. Pork supplies fell 1% from February and were slightly lower than year-ago levels. Pork bellies surged 9% from month-ago levels but fell 1% from 2018 levels. Pork cutouts bounced higher following gains over $3 per cwt in butts and hams. Pork cutout values added $0.62 per cwt, moving to $87.86 per cwt on 274 loads. CME cash lean index for 4/18 is $81.02, up $0.39. DTN Projected lean index for 4/19 $81.54, up $0.52.
TUESDAY'S CASH HOG CALL: Steady to $1 higher. Market stability is expected early Tuesday with most bids expected steady to firm. The early week pressure may limit upside market momentum over the next couple of days. Tuesday slaughter is expected at 477,000 head.
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