GENERAL COMMENTS:
Livestock futures spent most of the session sharply lower with lean hog trade leading the way based on concerns surrounding limited China sales. Moderate to strong buyer support moved back into the complex late in the session, which sparked aggressive lean hog gains. Cash cattle trade remained quiet Thursday, as most of the business for the week is likely to be done. With trade developing Tuesday and Wednesday, prices have seen significant market pressure. Live cattle trade developed at $120 per cwt, $2 to $3 per cwt lower than last week, while dressed trade ranged from $185 to $195 per cwt (mostly $190 to $194), as much as $8 per cwt lower than last week. There could still be some clean up trades seen Friday, although the underlying pressure in the complex is expected to limit overall market activity. National Daily Direct afternoon hog report is $0.09 higher with a weighted average of $79.74 per cwt. Full range of $72.00 to $83.00 per cwt on 7,944 head sold. Corn futures fell in light trade. July futures fell 11 cents per bushel. Dow Jones Index is 137 points lower with Nasdaq down 27 points.
LIVE CATTLE: Renewed buyer support moved into nearby live cattle trade as selling bounced off morning lows ($0.30 lower to $0.87 higher). Late day buying moved into live cattle trade following the inability to sustain early market pressure in all livestock trade. The lack of support through the complex during morning trade pushed prices lower with several contracts holding triple-digit losses. The cattle market remains oversold with open interest falling over 15% over the last two weeks. This has created additional volatility through the livestock market, which has led to increased pressure in the last few days.Beef cut-outs: lower, $0.41 lower (select, $207.08) and down $0.54 (choice, $222.47) with moderate demand and light offerings, 181 loads (90 loads of choice cuts, 27 loads of select cuts, seven loads of trimmings, 57 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL: Steady. The majority of cash cattle business is expected to have been wrapped up early in the week. There may be some additional clean up trade in the North, especially when it comes to live trade. But prices are not expected to deviate from early week price levels with a wide range seen through the week.
FEEDER CATTLE: Feeder cattle futures posted a midday turnaround Thursday following triple-digit morning losses transitioning into moderate buying interest by the end of the session ($0.22 to $0.60 higher). Strong underlying pressure seen through the first half of Thursday's trading session quickly ran out of gas and opened the door for active short covering at closing bell. This has done little to change the overall direction of the cattle complex. But the fact that prices broke away from contract lows Thursday afternoon is helping spark some renewed support through the complex. The active liquidation seen over the last couple of weeks has created a market vacuum that is begging increased noncommercial trade interest to move back into the complex through the upcoming days and weeks. CME cash feeder index for May 8 is unreported at this time.
LEAN HOGS: Strong early losses were replaced by firm buyer activity through late day trade ($0.15 lower to $1.45 higher). Wide market swings developed across lean hog futures trade Thursday with deferred contracts bouncing back from the lows seen through most of the morning. Deferred futures posted a wide trading range of nearly $4.50 per cwt with pressure developing in morning activity. Although little has changed in the complex, and the uncertainty concerning trade talks with China is keeping traders nervous, prices posted triple-digit gains at closing bell. Hog markets remain extremely oversold and a strong market correction is possible through the next few days. But traders remain concerned about overall potential for a trade deal or increased short term China buying. Pork cutouts bounced higher following an $8.64 rally in rib cuts. Pork cutout values gained $1.88 per cwt, moving to $86.82 per cwt on 221 loads. CME cash lean index for 5/7 is $82.68, up $0.05. DTN Projected lean index for 5/8 is $82.76 up $0.08
FRIDAY'S CASH HOG CALL: Steady to $1 lower. Bids are expected to remain steady to $1 per cwt lower, although overall bids are likely to be generally steady to weak once all the dust settles. Despite the pressure through the market, packers continue to look for market ready hogs at the end of the week, leaving underlying support through the entire complex. Friday slaughter should be near at 461,000 head. Saturday runs are expected at 12,000 head.
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