GENERAL COMMENTS: Market losses quickly developed in lean hog trade Monday morning as traders back away from previous highs. Although firm demand growth is likely through the end of the year, traders are trying to regain perspective following the recent unchecked market rally. Corn futures are higher in light trade. July futures added 1/2 cent per bushel. Dow Jones Index is 11 points higher with Nasdaq up 15 points.
CASH MARKETS: Cash cattle interest remains at a standstill with bids and asking prices undeveloped. Given trade in the South has developed on Wednesday each of the last four weeks, it is a strong possibility that additional interest will be seen midweek in the South and likely later in the week through the North. Showlists are generally larger during the week, which may allow for additional market activity when cash markets develop in the first couple days of May. National Daily Direct afternoon hog report is $0.13 higher with a weighted average of $79.38 per cwt. Full range of $72.00 to $83.25 per cwt on 6,617 head sold.
LIVE CATTLE: Sluggish trade activity leaves prices mixed ($0.60 lower to $0.22 higher). Limited interest is seen in live cattle futures for the second straight trading session. The underlying pressure in feeder cattle trade had little impact on the direction of the live cattle market, which posted 10 to 30 cent losses in most nearby contracts. More aggressive losses developed in late 2019 and early 2020 contract months with traders focusing on the underlying pressure in feeder cattle trade and wanting to align live cattle prices with the falling price levels. Beef cut-outs: mixed, $1.69 lower (select, $217.72) and up $0.15 (choice, $233.14) with good demand and heavy offerings, 106 loads (41 loads of choice cuts, 26 loads of select cuts, 26 load of trimmings, 13 loads of coarse grinds).
TUESDAY'S CASH CATTLE CALL: Bids and asking prices are still undeveloped early in the week with little interest expected most of Tuesday. Trade is not expected until midweek or later with prices potentially steady with last week.
FEEDER CATTLE: Firm pressure developed in late day trade ($0.55 to $1.77 lower). Despite limited early activity where prices remained mixed, firm pressure quickly moved in the feeder cattle complex late morning Monday. August futures led the complex lower with a $1.77 per cwt loss, as traders continue to search for any sign of support in the recent market freefall. August futures closed at $151.07 per cwt, just above March lows of $150.27 per cwt. A move below these levels would set 2019 lows and likely set an even weaker market tone across the entire complex. Feeder cattle futures have fallen over $8 per cwt in less than a week, allowing for long-term concerns of growing cattle supplies to take root across the complex. CME cash feeder index for 4/26 is $145.19 up $0.95.
LEAN HOGS: Firm pressure held in most contracts Monday as continued underlying pressure is causing concerns of further market weakness ($2.22 lower to $0.32 higher). Early losses swept through lean hog trade with traders focusing on follow through pressure after last week's price tumble. Even though traders continue to focus on pork movement heading to China, the overall lack of consistent week after week selling has brought some reality to the overly aggressive market. Prices have pulled back more than $10 per cwt from recent highs, but remains $13 per cwt above prices during early March. It is expected that buyer support will soon develop following the most recent correction and prices may continue to shift higher and lower through the end of the week based on results of Thursday's export sales report. Pork cutouts continue higher despite pressure in futures trade. Pork cutout values added $0.72 per cwt, moving to $84.99 per cwt on 253 loads. CME cash lean index for 4/25 is $83.73, up $0.33. DTN Projected lean index for 4/26 $83.46, down $0.27.
TUESDAY'S CASH HOG CALL: $1 lower to $1 higher. Limited interest is expected following the additional pressure in futures trade. Packers continue to look for market ready hogs but are not willing to chase prices higher in order to get them through the end of the month. Tuesday slaughter is expected at 477,000 head.
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