GENERAL COMMENTS: Lean hog futures were down sharply Tuesday with most contract months posting limit losses. The previous support seen in hog prices may continue to erode, although the market has seen extremely wide trading ranges over last few weeks. Cattle markets were inactive with prices mixed in a narrow-to-moderate range. Cash markets were quiet with a few token bids developing through the day. Bids of $124 live in the South and $203 dressed in the North were seen, but it is uncertain just how aggressive these bids will be this early in the week. Asking prices are generally undefined at this point, although a few asking prices are seen at $124 to $125 live basis. Trade will likely hold off until later in the week. The National Daily Direct afternoon hog report was $0.12 higher ($67.50-$78, weighted average $75.51) on 12,450 head sold. Corn futures were steady in light-to-moderate trade with May unchanged. The Dow Jones Index was 190 points lower with Nasdaq down 44 points.
LIVE CATTLE: Cattle futures moved in a narrow range Tuesday in limited trade. Futures settled mixed, $0.40 lower to $0.10 higher. Activity in the live cattle market remained subdued all day Tuesday. Most of the attention was diverted to the losses in hog futures, which kept cattle traders content with steady levels as limited short- and long-term direction is seen. There may be some additional shifts later in the week. But, at this point, volume is expected to be limited as traders try to keep pace with fundamental market moves. Beef cut-outs: lower, down $2.08 (select, $218.80) to down $0.35 (choice, $228.32) with good demand and light offerings, 116 loads (69 loads of choice cuts, 22 loads of select cuts, 5 load of trimmings, 20 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL: Steady. Initial activity is expected to remain sluggish with asking prices redeveloping at $124 to $125 live across the South. Northern asking prices are still undefined and may stay that way until later Wednesday. Most trade is expected to hold off until later in the week.
FEEDER CATTLE: Feeder cattle futures settled mixed, $0.57 lower to $0.57 higher. Cattle markets were able to avoid the volatility in lean hogs with prices hovering in a narrow range most of the session. This may add even more stability to the complex as prices are holding well to recent support levels. Although limited direction is expected over the near future, the complex is expected to remain in a sideways pattern. CME cash feeder index for 4/8 is $143.50, up $0.20.
LEAN HOGS: Lean hog futures fell sharply with most contracts down $3 per cwt. Overall, contracts closed $0.07 to $3.00 lower. Pressure quickly developed Tuesday morning as traders moved from position-taking to all-out liquidation. Trade in the May contract remained extremely limited, but led futures lower. By the end of the session, all contracts from May to December were locked limit lower, which will result in expanded trading limits of $4.50 per cwt Wednesday. Traders are concerned about the lack of information surrounding a trade deal with China and renewed concerns of other trade negotiations that may be breaking down with the European Union. Without additional sales to China developing in the near future, price support may continue to erode. Pork cutout prices slipped lower in limited movement. Pork cutout values fell $0.18 per cwt, moving to $83.11 per cwt on 360 loads. CME cash lean index for 4/5 is $78.68, up $0.15. DTN Projected lean index for 4/8 $78.89, up $0.21.
WEDNESDAY'S CASH HOG CALL: $1 lower to $1 higher. Cash hog prices are expected to hover in the same pattern as early week trade. Most bids are expected steady to 50 cents lower due to cash trade not yet getting caught up in the market volatility seen in futures activity. Wednesday slaughter is expected at 477,000 head. Saturday runs are expected at 56,000 head.
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