Friday Closing Livestock Market Summary - Backing Off on Saturday Kills

GENERAL COMMENTS:

Between coronavirus, the cattle inventory report and trying to keep up with what seems like a bottomless board, this week has been a handful. Hopefully the market will be able to capacitive on the positive findings of this week (cattle inventory report) and let the other problems fade into the background next week. Hog prices are lower on the National Direct Afternoon Hog Report, down $1.71 with a weighted average of $52.49. March corn is up 1 3/4 cents per bushel and March soybean meal is down $0.50. The Dow Jones Industrial Average is down 538.36 points and NASDAQ is down 116.88 points.

From Friday to Friday livestock futures scored the following changes:

February live cattle down $3.47, April live cattle down $4.63; March feeder cattle down $3.60, April feeder cattle down $4.97; February lean hogs down $10.10, April lean hogs down $11.85.

LIVE CATTLE:

Friday's anxiousness centered around the Cattle Inventory report, which unveiled that the Jan. 1 cattle inventory was down just slightly and that the 2019 calf crop is down 1%. It's important to remember that this is a bi-annual report, and that this is the first time in six year (the first time in the last 12 printed reports) that the data has shown a decrease in total numbers; that is significant, noteworthy and most definitely bullish.

The board was reluctant to get caught closing higher before confirmation that the report did indeed show lighter numbers. Nearby contracts closed mostly lower and deferred contracts closed mildly higher. February live cattle are down $0.40 at $121.37, April live cattle are down $0.52 at $119.67 and June live cattle closed $0.45 lower at $111.57. A light trade developed in the North mostly at $194 ($4.00 lower than last week's weighted average) and business in the South was mostly just clean up.

It's interesting to look at the last couple of weeks' worth of Saturday kills and it's important to notice that packers are starting to back off on Saturday kills and are trying to spread supplies out without having to invest higher in the cash market.

Boxed beef prices are lower: choice down $0.35 ($213.00) and select down $0.82 ($210.66) with a movement of 74 loads (37.66 loads of choice, 11.84 loads of select, 12.66 loads of trim and 11.58 loads of ground beef). Friday's slaughter is estimated at 122,000 head - steady with a week ago and 17,000 head more than a year ago. Saturday's slaughter is projected to be around 30,000 head.

MONDAY'S CASH CATTLE CALL: Steady. It will be interesting to see what Monday's showlists amount to, and at this point packers are going to work hard on keeping prices right where they have them.

FEEDER CATTLE:

Feeder cattle markets closed the week far better off than where things were headed earlier in the week. March feeders closed $0.42 higher at $136.07, April feeders closed $0.40 higher at $137.52 and May feeders closed $0.42 higher at $139.70. As the market closes down for the week and catches its breath before next week, most would agree that, although prices fell this week with the Cattle Inventory report showing lower numbers, next week has the opportunity to trade higher.

On Thursday an estimated run of 4,397 head at Billings Livestock Commission in Billings, Montana, compared to the previous week, feeder steers weighing less than 650 pounds showed lower undertones, steers over 650 pounds sold mostly steady with instances of slightly weaker. Heifers weighing 600 to 649 pounds sold as the best market test and sold $1.00 to $2.00 higher, while all other weights of heifers sold unevenly steady. As a side note, with the warmer weather, it was noticeable that calves are starting to pack a little more fill. The CME feeder cattle index 1/30/2020: down $0.50, $148.38.

LEAN HOGS:

Huge losses in the lean hog market leave the week $10.00 lower than last week's close in the February contract. The bottom of the board gave way on Wednesday and since then prices have dropped $7.00 in the last three days. February lean hogs close $4.17 lower at $57.12, April lean hogs close $4.22 lower at $61.60 and May lean hogs close $2.30 lower at $70.02. Pork cutouts totaled 340.69 loads with 310.71 loads of pork cuts and 29.98 loads of trim. Pork cutout values: down $1.33, $69.57. Friday's slaughter is estimated at 484,000 head, 10,000 head less than a week ago and 17,000 head more than a year ago. Saturday's slaughter is projected to be around 235,000 head. The CME lean hog index 1/29/2020: up $0.38, $62.78.

MONDAY'S CASH HOG CALL: Lower. It wouldn't be surprising to see prices lower again in the hog market, as the market is in what seems to be a perpetual downfall worrying about both internal and external factors.

#completecalfcare

Friday Midday Livestock Market Summary - Cattle Contracts Pushing Back to Buy Time

General Comments

Cattle contracts are prepared to move higher if the Cattle Inventory report unveils bullish numbers but until then the market tips back and forth waiting for a queue. March corn is up 2 cents per bushel and March soybean meal is up $0.40. The Dow Jones Industrial Average is down 422.96 points and NASDAQ is down 101.13 points.

LIVE CATTLE

Buying time seems to be the goal for the live cattle market as future contracts trade in both directions while a strong undertone is present but aren't overzealous as the complex waits for Friday afternoon's Cattle Inventory report. February live cattle are up $0.02 at $121.80, April live cattle are down $0.07 at $120.12 and June live cattle are down $0.17 at $111.85. Packers are feeling a little push back from feeders as no one seems eager to pull the trigger before the report shows what cattle figures are. Earlier Friday morning, three majors and one regional called around hoping to buy more cattle with the week's going rate, indicating that packers are still needing numbers.

Boxed beef prices are lower: choice down $0.01 ($213.34) and select down $0.58 ($210.90) with a movement of 58 loads (23.05 loads of choice, 9.33 loads of select, 12.66 loads of trim and 6.24 loads of ground beef).

FEEDER CATTLE

Feeder cattle markets are taking Friday with stride and encouraging the live cattle complex to push markets higher. Thursday was the last trading day for the January feeder cattle contracts so now the attention shifts to the March contract which is performing with ease. March feeders are up $0.57 at $136.25, April feeders are up $0.72 at $137.85 and May feeders are up $0.72 at $140.00.

LEAN HOGS

The lean hog market has fallen tremendously, dropping to levels not seen since late August as prices have dropped over $7.00 in the last three days alone. February lean hogs are down $2.60 at $58.70, April lean hogs are down $3.00 at $62.82 and May lean hogs are down $1.77 at $70.55. Nearby contracts are taking the brunt of the market's fall, while deferred contracts are lower but nothing near the same magnitude. DTN Lead Analyst Todd Hultman often says, "markets are people and people are emotional," which perfectly describes the market volatility in the lean hog sector currently.

The projected lean hog index for 1/29/2020 is up $0.38 at $62.78 and the actual for 1/28/2020 was printed at $62.40, up $0.66. Hog prices are lower on the National Direct Morning Hog Report, down $1.67 with a weighted average of $52.53, ranging from $48.00 to $55.94 on 7,795 head sold and five-day rolling average of $53.80. Pork cutouts totaled 190.16 loads with 170.76 loads of pork cuts and 19.41 loads of trim. Pork cutout values: down $0.08, $70.82.

https://www.keyagdistributors.com/livestock-products

#completecalfcare

Friday Morning Livestock Market Summary - Hog Markets Desperately Searching for the Bottom

GENERAL COMMENTS:

Moderate cash cattle trade developed through the South Thursday afternoon with prices hovering at $122 per cwt. This is steady with the limited midweek trade Wednesday, but $2 per cwt lower than last week. The underlying pressure in the complex is not a significant surprise given the fact that futures trade has tumbled lower the last week and beef values have been lackluster at best. Thursday trade in the North was limited to $194 to $195 per cwt, but some trade will potentially hold out until after the Cattle Inventory report Friday afternoon. Although this may not prove to be a significant change in market structure, the expectation of lower overall cattle inventory, especially lower beef cow numbers should bring some underlying support to the entire cattle complex. Given the fact that market moves the last week have had very little to do with rational thought and decisions, it is hard to expect trade to flip a switch and return to "rational decision making" before the end of the week. Futures trade showed light-to-moderate support Thursday as it appears the bearish undertone may be running out of gas in the cattle complex. Although the complex still remains oversold, the potential for end-of-the-month short-covering may quickly allow for price support at the end of the week. But the general tone of all livestock markets still remains generally weak as traders remain concerned about the short- and long-term impact of coronavirus in China, and the impact on not only immediate beef demand, but long-term economic factors. Friday slaughter runs are expected near 121,000 head.

Lean hog futures trade continues to be in "free fall" mode with everyone searching and looking for a bottom, but no one knowing just how much further it will move before panic selling stops. Limit losses in all nearby lean hog contracts Thursday not only pushes contracts to or near contract lows, but expands the aggressive losses over the last week. April futures have tumbled nearly $10 per cwt in the last week and concern of further losses are possible. The limit moves in trade Thursday also opens up the door for expanded trading limits on the last day of the week and month. This would allow prices to move $4.50 per cwt in either direction before trading is halted. The concern that prices could take another significant dive before markets close for the week and traders move onto February expectations could allow for additional panic selling during Friday's session. The lean hog complex remains oversold given the long-term expectations of demand, but at this point, rational thought has little to do with the current movements in the market as traders still remain focused on uncertainty surrounding coronavirus and just how this will impact overall demand with China. Moves in the market this week have reinforced just how dependent the U.S. is on the need to expand pork demand in China due to aggressive domestic pork production. Also the fact as stated over the last few weeks, that increased China trade has already been factored into the market, and any deviation from this demand growth will have a dramatic impact on price levels. Cash hog prices are called $1 lower to $1 higher with most bids expected steady to 50 cents lower. Slaughter Friday is expected at 491,000 head. Saturday runs are seen at 236,000 head.

	BULL SIDE		BEAR SIDE
1)	Traders expect to see a moderate pullback in cattle inventory levels in Friday's report. The focus on reduced beef cow numbers could help to support long-term buyer support through the entire complex.	1)	Lower cash cattle trade remains disappointing through the end of the month as both sides are starting to focus on larger market-ready supplies through late spring and summer months, creating the opportunity to push cash markets higher on a short timeline.
2)	Given the early week cash cattle trade, the focus on current-to-moderately tight market-ready supplies continues to stimulate active buying interest through the week. Even though cash cattle prices have softened, full pressure of futures losses over the last week have not been realized.	2)	Continued pressure in beef cutout values and generally weak packer margins through the end of the month are creating packer resistance to pay more for cattle, and allowing many to step into the market to book cattle through the middle of February. This could limit underlying support over the next few weeks given the still aggressive need for packers to fill commitments.
3)	Lean hog futures remain oversold following the recent market losses. This may create the opportunity for light-to-active short-covering early Friday morning due to limited overall volume in the complex.	3)	Limit losses in lean hog futures Thursday has sparked increased bearishness through the entire complex. This move may continue to add active liquidation Friday morning to most lean hog trade.
4)	Strong packer margins continue into late January as the aggressive pressure in futures trade has had little impact in cash hog or pork cutout prices at this point.	4)	Cash hog and pork cutout values struggled to maintain stability late in the week given the underlying bearish technical pressure in the complex. The fundamental market weakness through the end of the month could add additional widespread concerns during Friday trade.

#completecalfcare

Thursday Closing Livestock Market Summary - Let's Chat About Supply

GENERAL COMMENTS:

The cattle contracts were able to push through the day and capture moderate wins having the board close in the green as appose to lower prices again. Hog prices are lower on the National Direct Afternoon Hog Report, down $1.05 with a weighted average of $54.26. March corn is down 4 3/4 cents per bushel and March soybean meal is down $4.60. The Dow Jones Industrial Average is up 124.99 points and NASDAQ is up 23.77 points.

LIVE CATTLE:

The live cattle market has a lot of credit to give to the feeder cattle market for breaking the initial path to higher prices. Though the day only closes with moderate gains a day of higher prices is a win this week. February live cattle closed $0.02 higher at $121.77, April live cattle closed $0.02 lower at $120.20 and June live cattle closed $0.02 higher at $112.02.

A private source shared that two majors and one regional are all bought and booked into the week of Feb. 17. But interestingly enough, phones have been busy all afternoon as packers look around to see what's available, but are only wanting to pay this week's going rate. We all have a tendency of letting the little amount of vitamin D available this time of year get to us, but the fact that packers are calling and itching to get cattle bought before Friday's inventory report, and before the market, could see a moderate spark in prices is telling.

The major take away going into Friday is: 1) the market is extremely current and packers are trying to stretch inventory by minimizing Saturday kills, 2) Friday's Inventory Report may be more powerful than initially perceived given that packers have been aggressive Thursday afternoon.

Another test of light trade developed in parts of the South Thursday afternoon with live deals coming in at $122, steady with the week's earlier trade, $2.00 lower than last week's weighed average. Private sources shared that some cattle sold in Colorado at $122 to $122.50. And very little trade was reported in the North at $194 to $195.

Boxed beef prices are lower: choice down $0.17 ($213.35) and select down $0.45 ($211.48) with a movement of 131 loads (76.15 loads of choice, 14.12 loads of select, 11.67 loads of trim and 29.53 loads of ground beef). Thursday's slaughter is estimated at 123,000 head, 1,000 head more than a week ago and 8,000 head more than a year ago.

FRIDAY'S CASH CATTLE CALL: Slightly better. Seeing that packers are aggressively looking for cattle before Friday's Cattle Inventory report leads one to believe that they perceive the report to be bullish for feeders.

FEEDER CATTLE:

Being brave has its benefits and the feeder cattle market took Thursday with stride. March feeders closed $0.67 higher at $135.65, April feeders closed $0.05 higher at $137.12 and May feeders closed $0.07 higher at $139.27. When you look at March's chart it's seeming as if some what of a bottom is being established in the midst of the coronavirus scare, which is seeming to have weighed more heavily on the market than it should have.

On an estimated run of 5,550 head on Wednesday at Bassett Livestock Auction in Bassett, Nebraska compared to the previous week 500 to 650-pound steers traded unevenly steady, 700 pound steers trade $4.00 lower. Heifers weighing 400 pounds sold $6.00 lower, and heifers weighing 550 to 650 pounds sold evenly steady. The CME feeder cattle index 1/29/2020: down $0.71, $142.88.

LEAN HOGS:

Closing the day at $3.00 losses in the nearby contracts, and $2.37 lower to $2.97 lower in deferred contracts, the lean hog contracts have fallen apart late in the week. February lean hos are down $3.00 at $61.30, April lean hogs are down $3.00 at $65.82 and May lean hogs are down $3.00 at $72.32. Overbearing concern about the coronavirus? Worry about too much supply? The market implications that the new African swine flu vaccine could have? Or making way for cattle contracts to have somewhat of a successful Friday? There are plenty of reasons why the lean hog sector is diving lower.

Pork cutouts total 361.16 loads with 329.62 loads of pork cuts and 31.54 loads of trim. Pork cutout values: down $0.49, $70.90. Thursday's slaughter is estimated at 491,000 head, 6,000 head less than a week ago and 76,000 head more than a year ago. The CME lean hog index 1/28/2020: up $0.66, $62.40.

FRIDAY'S CASH HOG CALL: Lower. Seeing that the board is crumbling and slaughter has been aggressive throughout the week, packers may take the later part of the week easier.

#completecalfcare

Thursday Midday Livestock Market Summary - Cattle Contracts Split, Lean Hog Market Bears Lower

General Comments

As the noon hour approaches, cattle contracts are chewing on the idea of higher trade while the bottom of the lean hog market falls out, driving prices much lower. March corn is down 4 1/4 cents per bushel and March soybean meal is down $2.80. The Dow Jones Industrial Average is down 100.94 points and NASDAQ is down 42.98 points.

LIVE CATTLE

Some light trade is starting to emerge in parts of the South at $122, steady with Wednesday's late trade but $2.00 lower than last week's weighted averages. Cattle trade in the North has yet to really develop though live cattle are bid at $122 and dressed cattle at $194 to $195. As the day progresses it seems as if the board is contemplating the idea of following the feeder cattle market's lead and could try to trade higher. Deferred contracts are trading just slightly over steady while nearby contracts are going to need some more convincing. February live cattle are up $0.07 at $121.82, April live cattle are down $0.30 at $119.92 and June live cattle are down $0.20 at $111.80. If the board is able is able to influence prices to stretch higher, cash cattle trade could end up better than initially assumed.

Boxed beef prices are mixed: choice down $0.17 ($213.35) and select up $0.45 ($212.38) with a movement of 73 loads (43.97 loads of choice, 8.04 loads of select, 4.48 loads of trim and 16.04 loads of ground beef).

FEEDER CATTLE

Finding some mid-morning support, feeder cattle contracts creep into higher prices as the noon hour approaches. March feeders are up $0.67 at $135.65, April feeders are up $0.20 at $137.27 and May feeders are up $0.05 at $139.35. The March contract is getting an extra shot of support from traders who have to move their position from the expiring January contract -- which expires today.

LEAN HOGS

The lean hog market continues to break lower as nearby contracts trade $3.00 lower and the rest of the complex isn't far behind. February lean hogs are down $3.00 at $61.30, April lean hogs are down $3.00 at $65.82 and May lean hogs are down $3.00 at $72.32. Some of the market's chaos could be stemming from the continued worry of the coronavirus, and news that a vaccine that would prevent African swine fever is being tested. This would come as bearish news to American markets as U.S. hog producers have rigorously increased inventory anticipating that China's herd would be below usual production levels for quite some time.

The projected lean hog index for 1/29/2020 is up $0.38 at $62.78 and the actual for 1/28/2020 is up $0.66 at $62.40. Hog prices are lower on the National Direct Morning Hog Report, down $0.33 with a weighted average of $54.98, ranging from $48.00 to $55.94 on 4,865 head sold and five-day rolling average of $53.90. Pork cutouts total 199.19 loads with 181.01 loads of pork cuts and 18.17 loads of trim. Pork cutouts values: up $0.90, $72.29.

#completecalfcare

Thursday Morning Livestock Market Summary - Markets Brace for Additional Price Pressure

GENERAL COMMENTS:

Cash trade still remains sluggish and generally undeveloped going into Thursday morning. A few deals developed in the South about $2 per cwt lower than last week. The limited activity is still likely not enough to call a good market trend, but the combination of weaker cash markets and tumbling futures prices points to moderate price pressure. Asking prices still remain at $125 live in the South and $198 to $200 dressed in the North, but at this point, these seem nearly impossible given the bearish overall tone in all livestock futures trade. Futures trade is expected mixed in limited initial trade. Although the underlying bearish market tone from last week is expected to continue, traders are looking for short-covering opportunities. These opportunities typically present themselves early in the session when overall trade volume still remains light. If enough buyers can move into the market early Thursday morning, there is a chance of bringing stability to the live cattle and feeder cattle trade through the Thursday session. Traders are also looking forward to the cattle inventory report, which will be released Friday afternoon. The opportunity to adjust positions ahead of the report may cause some light interest, but the report itself will not be officially traded until next week given the release of the report will be after the markets close Friday. The overall focus in all livestock markets remains on long-term demand uncertainty. Although expectations that domestic demand will remain strong, the growing supply levels make it essential to escalate export demand of beef and pork in order to push prices higher. Thursday slaughter runs are expected near 121,000 head.

Lean hog trade is looking for any sign of market stability following another round of triple-digit losses Wednesday. This latest selling spree left most nearby lean hog contracts significantly unsupported with prices breaking through long-term support levels set in August of 2019. The move below $69.90 per cwt set last August is significant because this symbolized the overall bearishness of the entire lean hog complex and inability to move additional pork into China due to the continuing trade war and breakdown in trade negotiations early last fall. Following the August low, prices rallied over $15 per cwt on the hopes and expectations of a trade deal. Now that we have a signed partial trade deal in place, markets have once again tested and broken through these support levels. This time the main focus remains on concerns about overall demand surrounding the coronavirus in China. Although this pressure is not just based on overall concern for the amount of number of people affected, the coronavirus could have a significant impact on China's economy, which will significantly limit overall pork demand over the near and distant future. Cash hog prices are called $1 lower to $1 higher with most bids expected steady to firm. Slaughter Thursday is expected at 495,000 head. Saturday runs are seen at 228,000 head.

	BULL SIDE		BEAR SIDE
1)	Domestic beef demand is expected to continue through the upcoming months, which is likely to help build additional support into boxed beef values over the coming weeks.	1)	Firm underlying pressure in futures trade swept through live cattle and futures trade during the week. This is creating additional concerns that widespread trader liquidation may continue to develop through early February.
2)	A moderate pullback is in overall cattle inventory levels is expected in Friday's report. The main focus will be the expected lower beef cow numbers, which would indicate a move away from herd expansion in the next year.	2)	Indications from the few cash cattle deals that developed Wednesday point to moderate-to-firm cash market pressure. With January cash market prices showing little support over the last few weeks with markets steady at best, this comes as a disappointment given the tighter cattle supplies through the first quarter.
3)	Cash hog prices have continued to show support through the week as packers continue to remain aggressive in sourcing market-ready hogs to keep plants full through late January.	3)	Sharp triple-digit losses flooded into the wholesale pork market with cutout values falling over $4 per cwt Wednesday. The combined losses during the week is creating a bearish market picture when it comes to overall pork values through the end of the month.
4)	Mild weather conditions have sparked increased production levels at the farm and plant levels. Typical January levels make it a challenge to move hogs due to cold weather and increased snow limiting travel and hog safety. But the mild weather conditions in most areas have taken the focus away from traditional winter weather issues.	4)	Continued active support Wednesday in all nearby lean hog futures quickly broke through long-term support levels in April futures. The move below $69.90 per cwt was significant as this represented what many thought was the long-term market low, and an anchor to build upon through the trade war discussions with China.

#completeforageprogram

Wednesday Closing Livestock Market Summary - Livestock Contracts Bearish Even With USMCA Signing

GENERAL COMMENTS:

Wednesday's announcement of President Trump signing the USMCA had little effect on the day's market, much like the signing of the phase-one trade agreement where the market's enthusiasm had already been bolstered into the complex. The USMCA comes as a win for U.S. ag producers as DTN Ag Policy Editor Chris Clayton shared that, "Under NAFTA trade in north American has grown to about $1.3 trillion annually between the three countries. USMCA is projected to add about $68 billion in U.S. exports once fully implemented, which included $2.2 billion for U.S. agriculture."

Cash hog prices are higher again on the National Direct Afternoon Hog Report, up $0.56 with a weighted average of $55.36. March corn is down 2 1/4 cents per bushel and March soybean meal is down $1.50. The Dow Jones Industrial Average is up 12.24 points and NASDAQ is up 5.48 points.

LIVE CATTLE:

Live cattle contracts ranged $0.40 to $0.55 lower as they closed unable to find stability yet again. February live cattle closed $0.40 lower at $121.75, April live cattle closed $0.47 lower at $120.22 ad June live cattle closed $0.47 lower at $112.00. Though it wasn't enough trade to call the market trend for the week established, a handful of cattle did sell Wednesday afternoon in Kansas for $122, which is $2.00 lower than last week's weighted average.

Boxed beef prices closed mixed: choice up $0.67 ($213.52) and select down $0.23 ($211.93) with a movement of 127 loads (84.16 loads of choice, 12.86 loads of select, 9.85 loads of trim and 20.31 loads of ground beef). Wednesday's slaughter is estimated at 123,000 head, steady with a week ago and 11,000 head more than a year ago.

THURSDAY'S CASH CATTLE CALL: Lower. With packers testing the water at $122, it's going to make it hard for feeders to get prices much better than that unless they all stick together and hold trade out until late in the week.

FEEDER CATTLE:

Feeder cattle markets were left with no option but to trade lower. As cash cattle prices are anticipated to be lower, the live cattle board is weakening and demand for feeders in the sale barns in softening. March feeders are down $0.42 at $134.97, April feeders are down $0.70 at $137.07 and May feeders are down $0.85 at $139.20. On an estimated run of 5,517 head at OKC West Livestock Auction in El Reno, Oklahoma, and compared to last week, feeder steers traded fully steady, while feeder heifers sold $4.00 to $7.00 lower as demand for feeder cattle is starting to taper off. Steer and heifer calves traded sharply lower on a limited offering. The CME feeder cattle index 1/28/2020: down $0.17, $143.59.

LEAN HOGS:

The lean hog complex rendered the day plunging into lower prices again, suffering the most significant losses in the livestock complex. February lean hogs are down $1.92 at $64.30, April lean hogs are down $68.82 and May lean hogs are down 2.32 at $75.32. Pork cutouts totaled 373.47 loads with 323.57 loads of pork cuts and 49.91 loads of trim. Pork cutout values: down $4.49, $71.39. Wednesday's slaughter is estimated at 497,000 head, 4,000 head more than a week ago and 253,000 head more than a year ago. The CME lean hog index 1/27/2020: up $0.10, $61.74.

The sheer number of hogs being harvested right now has both bullish and potentially bearish effects on the market. On the bright side, while the board bleeds lower, the cash market has been able to capture positive movements throughout most of the week. But at some point, we have to fall back on the simple market principles of supply and demand and wonder where all of this processed pork is going to go.

THURSDAY'S CASH HOG CALL: Steady. With the market's weakness and the cash market's push to pull prices higher it wouldn't be surprising if at some point, sooner rather than later, the cash market exhausts its drive.

#completecalfcare

Wednesday Midday Livestock Market Summary - Livestock Contracts Can't Seem But to Trade Lower

General Comments

Livestock contracts don't have a lot of hopefulness for the day as the future's contracts trail lower and the cash cattle market isn't looking to trade positively. March corn is down 1 3/4 cents per bushel and March soybean meal is down $1.60. The Dow Jones Industrial Average is up 130.31 points and NASDAQ is up 34.73 points.

LIVE CATTLE

Support in the cattle contracts seems to be as reliable as a flickering flashlight while you're night calving that one cow who's tag reads, "spooky, jumpy, *$*@_%!." Earlier in the day live cattle and feeder cattle contracts attempted (ever so timidly) to press prices higher but support quickly fell and prices continue to drop for the fifth day now. And, not helping matters, packers are ready and eager to buy up fats while the market is depressed and opportunity to buy low presents itself. Packers have placed bids of $121 for live cattle in Nebraska and Texas, and $194 for dressed cattle in Nebraska. Asking prices are $125-plus in the South and $201 in the plus in the North. The Fed Cattle Exchange Auction listed three lots Wednesday morning totaling 477 head, all were set for 1-9 day delivery. Asking prices were at $123, but none sold. February live cattle are down $0.12 at $122.02, April live cattle are down $0.20 at $120.50 and June live cattle are down $0.35 at $112.12.

Boxed beef prices are mixed: choice up $0.98 ($213.83) and select down $0.13 ($212.03) with a movement of 70 loads (43.94 loads of choice, 7.55 loads of select, 5.75 loads of trim and 12.90 loads of ground beef).

FEEDER CATTLE

The feeder cattle market opened higher than Tuesday's close and seemed to have a shot of support and energy but not long after the day's opening, the market shot lower and continues to trade $0.05 to $0.87 lower. January feeder cattle are up $0.07 at $142.12 (and expire Thursday), March feeder cattle are down $0.10 at $135.30, April feeders are down $0.42 at $137.35 and May feeders are down $0.50 at $139.55. With support in the live cattle contracts becoming slimmer and slimmer, the feeder cattle contracts are going to have a tough go.

LEAN HOGS

Lean hogs may be leading the plunge lower on the board but at least the cash hog market is rallying. Lean hog contracts dive anywhere from $1.27 to $2.30 lower as the day enters the noon hour. February lean hogs are down $1.50 at $64.72, April lean hogs are down $2.30 at $69.00 and May lean hogs are down $2.17 at $75.47. Thankfully packers are still keeping a swift slaughter pace helping to keep one side of the market positive for the hog sector.

The projected lean hog index for 1/28/2020 is up $0.66 at $62.40, and the actual for 1/27/2020 is u $0.10 at $61.74. Hog prices are higher on the National Direct Morning Hog Report, up $0.68 with a weighted average of $55.48, ranging from $49.00 to $58.00 on 7,825 head and a five-day rolling average of $53.55. Pork cutouts total 195 loads with 172.94 loads of pork cuts and 22.07 loads of trim. Pork cutout values: down $2.85, $73.03.

#completeherdhealth

Wednesday Morning Livestock Market Summary - Traders Search for Stability Midweek

GENERAL COMMENTS:

Cash cattle trader remains dead in the water heading into the midweek session. With the aggressive losses seen in futures trade over the last several days, the concern that the underlying bearish tone of the market will significantly affect packers' desire and ability to offer cash values anywhere near steady money through the end of the week. Although packer and feeder interest has still remained generally quiet, it is expected that when cattle are priced, initial asking prices will be higher based on packer's needs to fill procurement levels during early February. But it may be Thursday or Friday before bids are seen, and may be a late Friday afternoon affair in getting cattle sold. Futures trade is expected mixed early Wednesday with live cattle futures appearing to remain generally oversold given the aggressive losses Monday and lackluster interest Tuesday while moderate support slowly trickled into the rest of the complex. The cattle inventory report is due out Friday, with early expectations of a 1% drop in levels from last January. This could give an overall firming support to the market, although it is important to remember that this report focuses more on long-term market direction due to the gaps between reports. But it still helps to give a good long-term view of the overall size of the beef herd. Wednesday slaughter runs are expected near 122,000 head.

Lean hog markets showed a sense of stability Tuesday, helping to break out of panic mode which developed the previous two trading sessions. This still leaves hog prices extremely vulnerable and under pressure, but the focus on testing long term lows seems to have eased slightly as the week continued. Increased pressure in pork cutout values has added even more uncertainty to the entire complex as traders remain concerned about demand for pork surrounding the advancement of coronavirus in China and other areas of the world. Statements Tuesday that the virus may not be as contagious as initially thought is helping to spark some more rational market decisions through midweek. The lean hog complex still remains under severe pressure, but the recent market softness is expected to have the complex oversold given the underlying need for pork worldwide, and expected strong domestic demand through the upcoming months. Cash hog prices are called $1 lower to $0.50 higher with most bids expected steady to 50 cents lower. Slaughter Wednesday is expected at 495,000 head. Saturday runs are seen at 235,000 head.

	BULL SIDE		BEAR SIDE
1)	Early expectations of total cattle inventory levels are projected to be 1% lower than last year. This would indicate a pullback from herd expansion, and put more focus on expected tighter market-ready cattle in the next year.	1)	Live cattle futures were the only livestock market not to hold initial morning gains Tuesday. The underlying softness in the complex and concern that follow-through weakness will develop over the upcoming weeks limited trade interest through the entire complex.
2)	Strong gains in select beef cutout values Tuesday is helping to regain partial confidence through the complex as the week continues. This is expected to help support overall boxed beef values find additional support based on still strong demand growth through the upcoming spring months.	2)	The recent pressure in cattle futures prices is causing expectations of steady to lower cash values at the end of the week. This could break away from the market stability seen through most of January and bring more focus on growing market-ready cattle supplies through the last half of the year.
3)	Advancements on a African swine fever vaccine are being seen, which would help to significantly alleviate the dramatic impact on world production levels. This not only would help impact areas where the fever is present, but also calm anxiety in countries where an outbreak is feared.	3)	Continued pressure in pork cutout values Tuesday adds additional underlying concerns to market stability through late January and early February. Without the ability to spark renewed pork cutout support, cash and futures prices are going to struggle to gain needed support.
4)	Strong underlying support moved into cash hog values Tuesday. This is a small victory given the underlying bearish market shift over the last week, but it still focuses on the need for packers to gain access to large numbers of market-ready hogs on a daily basis, creating potential for increased cash support through the upcoming days and weeks.	4)	Although overall hog production levels and hog numbers in China are hard to pin down, reported hog number growth in December could indicate that some of these herds which broke with African swine fever in the last year may be able to be repopulated. If herd sizes can continue to grow in China, this will limit the need for additional imports of pork over the coming months.

#completecalfcare

Tuesday Closing Livestock Market Summary - Lean Hog Market Strong, Cattle Complex Closes Weak

GENERAL COMMENTS:

Tuesday came as a bit of a mix for the livestock contracts. Initially the day started out strong in every division, but as time went on the lean hog market grew strong, being supported from the cash market, and cattle contracts grew weaker. Hog prices are higher on the National Direct Afternoon Hog Report, up $0.82 with a weighted average of $54.71. March corn is up 6 cents per bushel and March soybean meal is down $0.20. The Dow Jones Industrial Average is up 186.64 points and NASDAQ is up 130.37 points.

LIVE CATTLE:

Live cattle contracts are feeling pressure from nearly every angle this week. The board is struggling to find stable ground, cash cattle prices are expected to be lower and the USDA Inventory report is shared Friday, which many expect to be bullish but the weight of not knowing carries its own heavy load. February live cattle closed $0.10 lower at $122.15, April live cattle closed $0.60 lower at $120.70 and June live cattle closed $0.55 lower at $112.47.

Boxed beef cutouts closed mixed: choice down $0.74 ($212.85) and select up $1.66 ($212.16) with a movement of 153 loads (83.73 loads of choice, 30.10 loads of select, 10.44 loads of trim and 28.33 loads of ground beef). Tuesday's slaughter is estimated at 117,000 head, 6,000 head less than a week ago and steady with a year ago.

WEDNESDAY'S CASH CATTLE CALL: Slightly lower. Cash cattle trade has yet to surface, but an overall feel for how trade may develop could come as early as Wednesday morning from the Fed Cattle Exchange, though it's expected that trade will wait to really get underway until later in the week.

FEEDER CATTLE:

Nearby feeder cattle contracts were able to hold onto the day's rally while deferred contracts dipped into red prices. January feeders are up $0.15 at $142.05, March feeders are up $0.22 at $135.40 and April feeders are down $0.22 at $137.77.

On Monday, with an estimated run of 6,027 at the Sioux Falls Regional Cattle Auction in Worthing, South Dakota, compared to last week feeder steers under 550 pounds sold steady with instances of $5.00 higher, steers over 600 pounds sold for $2.00 to $4.00 lower. The demand was best met with light fleshed steers under 550 pounds and there was a moderate demand for the heavier weight steers and heifers. The CME feeder cattle index 1/27/2020: down $0.56, $143.76.

LEAN HOGS:

It was a significant day for the lean hog complex as cash prices were just shy of trading $1.00 stronger, pork cutouts were huge and the board successful closed higher when the feeder cattle contracts weakened mid-afternoon. On another positive note, progress is being made with the African swine fever vaccine as USDA's researchers from the Plum Island Animal Disease center shared that they've been testing a vaccine that is proving to be wildly effective in treating the disease. February lean hogs closed $0.27 higher at $66.22, April lean hogs closed $0.85 higher at $71.30 and May lean hogs closed $0.67 higher at $77.65 Pork cutouts totaled an enormous 425.39 loads with 384.42 loads of pork cuts and 40.98 loads of trim. Pork cutout values are down $1.38, $75.88. Tuesday's lean hog slaughter is estimated at 498,000 head, 5,000 head more than last week and 32,000 head more than a year ago. The CME lean hog index 1/24/2020: up $0.11, $61.64.

WEDNESDAY'S CASH HOG CALL: Steady to slightly higher. Seeing that the cattle market is going to be pressured from nearly all angles, the lean hog complex is going to have the opportunity once again this week to make advancements while the rest of the livestock contracts try to stabilize.

#completeherdhealth