GENERAL COMMENTS: Sales of U.S. pork to China was the focus of the livestock trade's attention Thursday, allowing traders to focus on long-term market direction and confirm previous market support. Cattle futures posted light-to-moderate gains, although limited trade activity and a lack of new market information seemed to slowly limit gains later in the session. Cash cattle activity remained undeveloped Thursday. Light-to-moderate trade in the South on Wednesday has set the tone of the market and could keep additional Southern trade from developing through the rest of the week. Trade still needs to be done in the North with wide price gaps holding between asking prices and bids. Current bids remain at $124 to $126 live and $203 to $204 dressed. Asking prices are holding at $128 and higher live and $207 dressed. The National Daily Direct afternoon hog report was $1.38 lower ($67-$77, weighted average $74.82) on 4,906 head sold. Corn futures were lower in light-to-moderate trade with May falling 1 3/4 cents per bushel. The Dow Jones Index was 40 points lower with Nasdaq down 23 points.
LIVE CATTLE: Light gains held following firm buyer interest. Futures closed $0.12 to $0.47 higher. The focus in the complex has been on choppy but generally stable cash and beef values over the last couple of weeks. This has limited trade in all cattle markets. The surge in hog futures Thursday helped create some spillover interest, but early gains eroded through the session based on limited additional market information. Traders seem to remain content allowing prices to chop around in a moderate range through most of the spring months. Beef cut-outs: mixed, up $0.33 (select, $219.95) to down $0.22 (choice, $228.83) with light-to-moderate demand and offerings, 111 loads (64 loads of choice cuts, 11 loads of select cuts, no load of trimmings, 36 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL: Steady. With the tone of the market set in the South due to light-to-moderate trade Wednesday, most of the attention is now moving to Northern trade. Bids and asking prices remain with a wide gap, although the lack of wide shifts in beef or futures trade is likely to limit intensity until late Friday.
FEEDER CATTLE: Feeder cattle futures saw firm gains of $0.25 to $0.82 as traders slowly trickled into the complex Thursday. Limited direction was seen across all cattle markets Thursday. But the recent market pressure seemed to run its course, leaving little additional selling pressure able or willing to move into the complex. Consistent buying activity developed across the entire complex, with May through September futures posting gains of 62 cents in each contract month. The uniformity of the market is unusual and represents the lack of volume in the complex. CME cash feeder index for 4/10 is $143.35, down $0.28.
LEAN HOGS: News of U.S. pork sales to China sparked buying interest in lean hogs, pushing futures $0.32 to $2.07 higher. Interest remains limited in the spot April contract, but limited support in short-term fundamentals is keeping the price spread wide between spot futures and the rest of the complex. Futures saw early limit gains following the news of extremely large sales to China. This represented the largest one-week sales reported in over six years. But futures seemed to slowly pull back later in the day, as trade with China seems to have already been factored into the complex. At this point, continued large sales may be needed week after week to meet expectations of the already aggressive market structure. Anything less is likely to be viewed as a disappointment. Pork cutout prices firmed following longer-term futures support. Pork cutout values added $0.49 per cwt, moving to $84.43 per cwt on 263 loads. CME cash lean index for 4/9 is $79.29, up $0.40. DTN Projected lean index for 4/10 $79.36, up $0.07.
FRIDAY'S CASH HOG CALL: Steady to $1 lower. Despite the strength in futures trade, cash markets are slow to develop. Most bids are expected to remain steady. The availability of market-ready hogs, along with weather limiting procurement levels at several plants, is likely to limit the upside potential of cash hog markets. Friday slaughter is expected at 461,000 head. Saturday runs are expected at 68,000 head.
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