GENERAL COMMENTS: Strong technical pressure redeveloped Thursday with triple-digit losses in feeder cattle adding pressure to live cattle futures. Hog markets firmed early despite no additional U.S. sales to China. But most support eroded through the day as pressure in deferred contracts led to bearish concerns. Cash cattle activity remained quiet midafternoon Thursday following moderate trade in all areas over the previous two days. Cash business is expected to be done with limited additional interest likely to develop before the weekend. Cash cattle prices fell $3 to $5 per cwt from last week's levels with live trade developing at $123 to $124, while dressed trade moved to $198 to $200 per cwt. This may add even more uncertainty early next week given the quickly developing trade. The National Daily Direct afternoon hog report was $1.50 lower ($72-$83, weighted average $78.98) on 9,335 head sold. Corn futures bounced higher in light trade with July up 2 cents per bushel. The Dow Jones Index was 143 points lower with the Nasdaq down 21 points.
LIVE CATTLE: Live cattle futures followed feeder cattle lower, closing down $0.20 to $1.12. October through April contracts saw triple-digit. Early mixed trade appeared to add some much-needed stability to the complex, but any sign of buyer support evaporated near midday when pressure moved back into all feeder cattle futures. The combined focus on lower cash cattle trade and traders testing long-term support has created additional technical weakness through the entire cattle complex. Beef cut-outs: lower, down $2.42 (select, $215.08) to down $1.42 (choice, $228.80) with light demand and moderate offerings, 153 loads (77 loads of choice cuts, 30 loads of select cuts, 12 load of trimmings, 34 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL: Steady. Trade is likely done for the week in all areas following early week activity Tuesday in the South and Wednesday in the North. A few cleanup trades may develop before the weekend, but the tone of the market has been set.
FEEDER CATTLE: Pressure redeveloped in feeder cattle futures as traders searched for any sign of supportive news. Futures settled $1.32 to $2.40 lower. The tone of the entire cattle complex continues to be bearish. The May contract continues to set contract lows, while August is quickly approaching contract lows of $146.60 following triple-digit losses over the last couple of weeks. The May contract has fallen $12 per cwt on technical pressure as continued liquidation is seen at the end of the week. CME cash feeder index for 5/1 is $143.90, down $0.73.
LEAN HOGS: Mixed trade left traders uncertain of the next market move following midweek support. Futures closed $1.75 lower to $1.52 higher. Early buyer support Thursday morning sparked triple-digit gains through all nearby contracts. Despite no additional sales of U.S. pork to China in the export sales report Thursday morning, traders remained relatively optimistic. Pressure mainly started to develop in late 2019 and 2020 contract months, which initially saw narrow losses. The lack of good news through the session slowly but steadily added pressure to the entire complex. Pork cutouts surged higher based on aggressive price gains in rib and belly cuts. Pork cutout values added $1.93 per cwt, moving to $83.92 per cwt on 239 loads. CME cash lean index for 4/30 is $83.33, up $0.06. DTN Projected lean index for 4/30 is $83.23, down $0.10.
FRIDAY'S CASH HOG CALL: Steady to $1 lower. Little change is expected at the end of the week with packers likely bidding steady to $1 per cwt lower. Most bids are expected steady to 50 cents lower as packers try to reduce overall spending. Lighter weekend processing schedules will not significantly affect pork tonnage, but sends a message that they are cutting production. Friday slaughter should be near at 464,000 head. Saturday runs are expected at 32,000 head.
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