GENERAL COMMENTS: Trade was mixed throughout the livestock complex midweek as pressure in nearby contracts was offset by support in deferred contract months. Cash cattle trade started to develop Wednesday, marking the fourth consecutive week that at least light trade has developed midweek. Sales in the South at $126 per cwt are $2 per cwt higher than last week. This is likely to be enough cattle to set the tone for Southern markets and could limit additional trade in Texas and Kansas through the rest of the week. Northern trade is still undeveloped, although bids are becoming more active at $126 to $127 live and $204 dressed. It may be Thursday or Friday before these areas trade cattle. Asking prices are firming as the day continues, with live cattle priced at $128 to $130 and $208 and higher dressed. The National Daily Direct afternoon hog report was $0.20 lower ($70-$80, weighted average $77.18) on 7,125 head sold. Corn futures were lower in light trade with May down 3/4 cent per bushel. The Dow Jones Index was 3 points lower with the Nasdaq down 4 points.
LIVE CATTLE: Live cattle futures closed mixed ($0.22 lower to $0.60 higher) in limited trade. Nearby contracts struggled to gain traction with June slipping 7 cents at closing bell. Light-to-moderate support slowly but steadily moved into deferred contracts through the last half of the trading session despite limited volume. With markets closed Friday for Good Friday, trade activity is expected to remain subdued Thursday. There is likely to be some additional support through the complex, as prices continue to inch higher while remaining confined in a wide sideways trading range. Beef cut-outs: mixed, down $0.99 (select, $220.16) to up $0.71 (choice, $232.76) with light-to-moderate demand and offerings, 184 loads (113 loads of choice cuts, 27 loads of select cuts, 14 load of trimmings, 30 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL: Steady to $2 higher. The development of light-to-moderate trade in the South Wednesday is setting the tone for higher market prices on cattle yet to be sold. Sales reported midweek at $126 per cwt are $2 per cwt higher than last week.
FEEDER CATTLE: Limited volume kept prices mixed Wednesday as traders look for longer-term direction. Futures settled $0.60 lower to $0.92 higher. Sluggish trade throughout Wednesday's session added uncertainty to the cattle market. Although the tone of the market is firming, prices may find it challenging to break out of the current range. The May contract saw moderate pressure due to sluggish live cattle support and caution ahead of the Cattle on Feed report, set for release on Thursday. But firm buying moved into deferred futures based on expected long-term support. CME cash feeder index for 4/16 is $143.58, up $0.12.
LEAN HOGS: Nearby and deferred lean hog contracts continued to move in opposite directions, settling $1 lower to $1.20 higher. Follow-through selling developed in all nearby contracts, pushing spot June $1 per cwt lower. The market spread between June and December contracts was nearly cut in half over the last three trading sessions as moderate-to-strong support continues to be seen in all late-2019 and 2020 contract months. At the same time, nearby contracts are eroding based on lack of short-term support and sluggish fundamentals. The expectations that additional sales will be seen in Thursday's export sales report has helped to solidify long-term buying in the complex. But the danger in this aggressive shift higher is that traders can be quickly convinced to back away from the market without constant evidence of continuing export sales. Pork cutouts firmed based on strong gains in butt and rib primals. Pork cutout values added $0.47 per cwt, moving to $87.00 per cwt on 260 loads. CME cash lean index for 4/15 is $79.84, up $0.27. DTN Projected lean index for 4/16 $80.24, up $0.40.
THURSDAY'S CASH HOG CALL: Steady to $1 higher. Underlying support, especially in late-month futures contracts and the firming of pork values is expected to add additional support to cash trade. Most bids are expected steady to 50 cents higher, as price shifts are expected to remain sluggish. Thursday slaughter is expected at 475,000 head. Saturday runs are estimated at 89,000 head.
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