Strong early week losses have quickly developed through all livestock trade with traders pulling away from previous gains seen last week. Concerns of growing beef supplies and uncertain China demand has sparked triple digit losses. Corn futures are lower in light trade. May corn futures are 1 3/4 cent lower. Stock markets are mixed in light trade. Dow Jones is 29 points lower with Nasdaq up 7 points.
LIVE CATTLE:
Strong weakness in feeder cattle futures and generally pressure in most commodity markets is adding to softness in live cattle trade midday Monday. June futures are leading the complex lower with a $1.55 per cwt loss as traders adjust to larger than expected cattle on feed as of April 1. This continues to create concerns that additional market weakness may develop over the next few trading sessions. Traders seem to be sensitive about posting significant market shifts, which is likely to keep prices well contained in the current sideways-moving market. Cash cattle interest is quiet following firmer trade late last week. Show list distribution and inventory taking is expected to be the extent of trade as bids and asking prices are not expected until midweek or later in most areas. Boxed Beef cut-outs at midday are higher, $1.46 higher (select) and up $0.98 per cwt (choice) with light movement of 34 total loads reported (15 loads of choice cuts, 15 loads of select cuts, 4 loads of trimmings, 1 load of ground beef).
FEEDER CATTLE:
Strong triple-digit pressure has quickly moved through feeder cattle trade with October through January futures leading the market lower with $2.30 to $2.50 per cwt losses. Traders are working through the larger-than-expected cattle placement levels seen on Thursday's report, which may spark additional underlying softness through the entire complex through the first half of the week. Trade volume has slowed at midday, but the weaker tone in the market is likely to be carried through the end of the session.
LEAN HOGS:
Strong pressure has continued to develop through all lean hog futures trade with June futures leading the market lower with a $1.95 per cwt loss at midday. The inability to sustain buyer support at the end of last week has added uncertainty to the potential buyer interest through the end of the month. Even though traders continue to look for increased pork sales to China and focus on any potential trade agreement, the overall concern that the aggressive market structure early in the month may be overstated and hard to maintain long term is causing some traders to quickly reposition holdings, allowing for moderate to strong price losses Monday morning. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $2.21 at $78.73 per cwt with the range from $73.00 to $79.46, on 5,170 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork values firmed in early week activity despite limited volume. Pork cutouts added $0.46 per cwt at $87.70 per cwt with 111 loads traded. Lean hog index for 4/18 is $81.02 up 0.39, with a projected two-day index is $81.54 up 0.52.
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