GENERAL COMMENTS: Technical support quickly pushed feeder cattle futures off contract lows, sparking active buying throughout the complex. Hog futures rebounded following moderate-to-strong early losses as traders worked through disappointment over export sales cancelations to China and refocused on long-term demand growth. Cash cattle trade started to develop in the North with live trade seen at $117 per cwt. This is $3 per cwt lower than last week, but steady with Wednesday's trade. Dressed trade remained undeveloped Thursday afternoon with bids at $185 to $186 per cwt. It is likely that live trade in the South and North may be wrapped up for the week, with dressed business still needing to be done. Asking prices are still at $120 live and $189 to $190 dressed. The National Daily Direct afternoon hog report was unavailable at the time these comments were posted. Corn futures posted strong gains in light trade with July up 9 1/2 cents per bushel. The Dow Jones Index was 214 points higher with Nasdaq up 72 points.
LIVE CATTLE: All live cattle contracts saw support Thursday, closing $0.80 to $1.45 higher. Even with early pressure testing support levels, buyers slowly but steadily moved back into the complex during the last half of the trading session. There continues to be increased support through the complex as traders focus on the potential to regain recent losses in what is considered to be an oversold market. With moderate-to-strong beef demand expected to continue through the rest of spring and summer, commercial and noncommercial buying is expected to develop through late May. Beef cut-outs: lower, down $0.16 (select, $207.88) to down $0.01 (choice, $219.56) with good demand and moderate offerings, 145 loads (63 loads of choice cuts, 33 loads of select cuts, 14 load of trimmings, 35 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL: Steady with early week trade. Cash business over the last two days has set the tone for the week with live business needing to be done likely to be $3 to $4 per cwt below last week's levels. Dressed trade still needs to actively develop, but weaker cash prices are expected.
FEEDER CATTLE: Strong early losses in feeder cattle were offset by buyer support moving into the complex Thursday. Futures settled mixed, $1.70 lower to $1.12 higher. Strong liquidation through the first half of the session quickly evaporated and left the market in a vacuum that buyers quickly filled. This pushed most contracts $1 per cwt higher. There may be some additional volatility in the complex due to higher grain prices, but the focus on long-term demand growth is likely to keep prices from moving significantly lower. CME cash feeder index for 5/15 is unreported at this time.
LEAN HOGS: Firm end-of-the-week buying support continued into closing bell, offsetting early pressure. Futures closed $0.10 to $0.97 higher. Futures initially plunged by triple digits following a bearish export sales report showing cancelations of U.S. pork sales to China. But as additional volume moved into the complex, the tone shifted from weak to positive as traders focused on expectations that reduced global supplies will continue to be bullish for pork demand despite the trade war with China. The most significant support developed in fourth-quarter trade, but steady buying was seen throughout the complex. Pork cutouts eroded Thursday following a $27.93-per-cwt loss in the rib market. Pork cutout values fell $0.68 per cwt, moving to $86.13 per cwt on 334 loads. CME cash lean index for 5/14 is $83.67, up $0.40. DTN Projected lean index for 5/15 is $84.20 up $0.53.
FRIDAY'S CASH HOG CALL: $1 lower to $1 higher. Packers are coasting into the end of the week with limited direction expected the next couple of days. The attempt to reduce production levels and cut the need to buy additional hogs will likely keep markets steady to firm, but steady demand and tighter supplies of market ready hogs will keep markets from falling significantly. Most bids are expected steady to firm Friday morning. Friday slaughter levels are expected at 458,000 head with 74,000 expected Saturday.
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