GENERAL COMMENTS: Lean hog futures rose sharply Tuesday with limit gains seen in May and June contracts. Because of this, expanded trade limits will be in place Wednesday, allowing for potential additional support. Meanwhile, the feeder cattle market was under pressure late Tuesday. Cash cattle activity remained at a standstill Tuesday afternoon. Although this is not a shock to most market watchers, the lack of early week bids and asking prices following the midweek trade last week seems to indicate that both sides may be willing to wait out the other side. Both offers and asking prices are expected to develop over the next couple of days in all areas. The National Daily Direct afternoon hog report was $0.14 lower ($67-$77, weighted average $75.14) on 5,820 head sold. Corn futures were mixed in light-to-moderate trade with May down 1/4 cent. The Dow Jones Index was 79 points lower with the Nasdaq up 19 points.
LIVE CATTLE: Live cattle trade was mixed following weakness in feeder cattle. Futures closed $0.87 lower to $0.17 higher. Firm support early Tuesday quickly eroded as deferred contracts quickly followed feeder cattle contracts lower. Narrow gains remained in spring and summer contracts as traders continued to focus on firming demand expectations and the potential to rekindle buyer activity through the next several weeks. But a strong pullback in feeder cattle trade late Tuesday pulled most early buyers away from the complex. Limited volume was seen in deferred late-2019 contract months, but the weaker market tone could limit late-week support. Beef cut-outs: lower, down $0.84 (select, $218.49) to down $1.11 (choice, $225.73) with moderate demand and light offerings, 141 loads (107 loads of choice cuts, 15 loads of select cuts, 5 load of trimmings, 13 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL: Steady. Bids and asking prices remain quiet and will likely stay that way early Wednesday. Some interest is expected to develop midweek, but most trade may not develop until Thursday or Friday.
FEEDER CATTLE: Losses quickly developed Tuesday in the feeder cattle market. Futures settled $0.60 to $1.45 lower. Despite early mixed trade on spillover support from the hog trade early in the session, the feeder cattle market took on a weaker tone at midday. This sparked additional selling pressure in all contracts as most futures traded $1 to $1.45 per cwt lower, based on limited interest and firming feed prices. Nearby contracts still remain within the wide trading range that developed in March. This could allow wide market shifts without any significant technical signals developing over the next couple of weeks. CME cash feeder index for 3/30 is $142.50, up $0.08.
LEAN HOGS: Lean hog futures rose sharply Tuesday, closing $1.55 to $3.00 higher. Strong buyer interest moved back into the complex, as traders feel that, at some point, a trade deal will get signed between the U.S. and China and that losses due to African swine fever will stimulate more buying in the long term. May and June contracts posted triple-digit gains, which was enough to expand trading limits Wednesday. Pork cutout prices slipped as overall softness early in the week had an impact on most primal cuts. Pork cutout values fell $0.44 per cwt, moving to $81.71 per cwt on 355 loads. CME cash lean index for 3/29 is $75.80, up $1.92. DTN Projected lean index for 3/30 $76.78, up $0.98.
WEDNESDAY'S CASH HOG CALL: Steady. Despite the strong futures market rally, cash markets are still expected to remain generally steady midweek. The focus on recent market pressure is still causing some limited interest as packers are able to gain access to needed market ready hogs without increasing spending. Wednesday slaughter is expected at 477,000 head. Saturday runs are expected at 146,000 head.
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