GENERAL COMMENTS: Cattle futures turned sharply lower with triple-digit pressure through the entire complex. This pushed markets through support levels, breaking out of the sideways pattern of the last few weeks. Hog futures stabilized, although limited movement was seen in most contracts. Corn futures are lower in light trade. July futures fell 4 1/4 cents per bushel. The Dow Jones Index is 23 points lower with Nasdaq up 2 points.
CASH MARKETS: Cash cattle trade has continued the trend of the last month with light-to-moderate activity in the South on Wednesday. Cash trade is $126 to $127 per cwt in Kansas and Texas, steady to $1 per cwt higher than last week. Trade in the North will be delayed until Thursday or Friday with limited bids holding at $125 live and $205 dressed. Asking prices remain firm at $130 live and $212 dressed. National Daily Direct afternoon hog report is $0.41 higher with a weighted average of $80.98 per cwt. Full range of $73.00 to $83.50 per cwt on 12,787 head sold.
LIVE CATTLE: Triple-digit losses quickly swept through the complex as traders remain focused on lack of short-term support early in the week ($0.05 to $0.57 lower). Given lackluster support in beef values over the last couple of days, traders are focusing more on the inability to spark buyer support and potential fundamental pressure. This creates a strong technical resistance, which broke through support levels of $120 per cwt, and moved June futures to $118.30 per cwt. March support of $118.67 per cwt is still holding, which traders will closely watch early Thursday morning. A move below this level through the rest of the week will likely spark additional aggressive market losses through all live cattle trade. Beef cut-outs: lower, $0.98 lower (select, $220.28) and down $1.15 (choice, $232.96) with good demand and moderate to heavy offerings, 116 loads (78 loads of choice cuts, 35 loads of select cuts, 17 load of trimmings, 34 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL: Steady to $1 higher. Light-to-moderate cash trade developed in the South on Wednesday. This should set the tone of the market, but additional activity will likely need to be done, especially in the North. Bids should improve Thursday, but trade may not be seen until Friday.
FEEDER CATTLE: Sharp losses quickly turned the overall sideways market down ($2.22 to $3.10 lower). Aggressive selling pressure quickly moved back into the complex. This added even more uncertainty to the feeder cattle market with nearby futures breaking through short-term support. Prices have broken out of the sideways range seen in April, allowing for potential liquidation to continue through the end of the month. Additional concerns are developing surrounding growing supply levels of feeder cattle as well as overall beef supplies through the summer months. CME cash feeder index for 4/23 is unavailable at this time.
LEAN HOGS: Firm gains slowly moved back into hog futures at midweek ($0.42 lower to $1.35 higher). Limited early losses Wednesday morning were quickly swept away as buyers moved into nearby contracts. Although May futures are extremely lightly traded, the strong support in the market pushed prices $1.35 per cwt higher. June futures, which are acting as spot month, moved 40 cents higher as limited underlying support moved into the complex following aggressive early week losses. The focus on Thursday's export sales report was looking for additional sales to China. This will likely set the tone for the rest of the week, and likely the end of April. Pork cutouts posted sharp losses with aggressive pressure in most primal cuts. Pork cutout values fell $1.94 per cwt, moving to $86.98 per cwt on 307 loads. CME cash lean index for 4/22 is $82.07, up $0.53. DTN Projected lean index for 4/23 $82.79, up $0.72.
THURSDAY'S CASH HOG CALL: Steady to $1 higher. Cash hog bids are expected to start out steady to $1 per cwt higher Thursday as packers continue to fuel active procurement levels. The overall support in the market is likely to see prices through the entire range depending on region and local needs of packers. Thursday slaughter is expected at 477,000 head. Saturday runs are expected near 142,000 head.
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