GENERAL COMMENTS:
Cattle futures trade resembled a game of
"whack-a-mole" Friday as short bursts of buying posted gains. But this
was followed by a firm beat down as sharp losses developed in most
contracts at the closing bell. The narrative has not changed through the
week, with the focus on potential coronavirus impact to domestic and
global economies and buying habits heavily affecting livestock trade.
Hog prices are higher on the National Direct Afternoon Hog Report, up
$0.25 with a weighted average of $50.59. May corn is up 1/4 cent per
bushel and May soybean meal is up $2. The Dow Jones Industrial Average
is down 797.94 points and NASDAQ is down 153.62 points.
From Friday to Friday, livestock futures scored
the following changes: Feb Live cattle off $7.02, Apr Live cattle off
$10.68; Mar Feeder cattle off $8.92, Apr Feeder cattle off $9.40; Apr
Lean hogs off $4.75, May Lean hogs off $5.00.
LIVE CATTLE:
Glimmers of hope developed through the Friday
trading session as traders adjusted positions at the end of the month
despite remaining on the "coronavirus fear" roller coaster. February
futures expired, sparking single-digit gains, while the rest of the
complex posted sharp losses. Markets closed $2.90 lower to 7 cents
higher Friday afternoon. The lack of understanding of how or when any
impact from coronavirus will have on beef demand or overall consumer
habits kept most markets with active losses at the end of the week.
April live cattle are down $1.90 at $107.57, June live cattle are down
$2.72 at $101.20 and August live cattle are down $2.20 at $102.27.
Following early week trade in all areas, little to no interest was seen
Friday in cash cattle markets. Given the strong downward pressure seen
in cash trade -- while futures continue to wither away -- is limiting
both sides incentive to step into the market. Activity is not expected
to be significant until midweek next week as Monday's focus will be on
show list distribution and inventory needs, while trying to assess the
overall market direction going forward.
Boxed beef prices closed lower: choice down
$0.24 ($205.30) and select down $0.78 ($198.91) with a movement of 104
loads (58.22 loads of choice, 14.86 loads of select, 8.67 loads of trim
and 21.97 loads of ground beef). Thursday's slaughter is estimated at
115,000 head, 6,000 lower than a week ago and 2,000 head lower than a
year ago.
MONDAY'S CASH CATTLE CALL: Steady. Even if
continued pressure develops in futures trade, Monday activity is
expected to be reserved for inventory taking and show list distribution
as both sides assess further market direction during early March.
FEEDER CATTLE:
Feeder cattle contracts recovered a little piece
of the market as the day's end neared. Contracts closed $1.30 to $2.02
lower Friday. March feeders are down $1.30 at $131.27, April feeders are
down $1.37 at $132.70 and May feeders are down $2.02 at $133.52. Friday
trade posted back and forth moves as traders focused on the general
underlying bearish tone that has continued all week, but attempts to
cover positions at the end of the week and month allowed for momentums
of higher trade during the day. With sharp losses seen at the closing
bell, the underlying pressure remains strong through cattle trade going
into the month of March.
Lexington livestock market in Lexington Ne,
reported 2,394 head for the week with steers selling $1 to $6 per cwt
lower than last week, while heifers sold $1 to $4 per cwt lower. The CME
feeder cattle index 2/27/2020: not available at this time.
LEAN HOGS:
Lean hog futures were the most stable of all
livestock markets with nearby futures holding the best; the complex
ranging from $0.27 to $1.30 per cwt losses. The most aggressive pressure
developed in summer and fall contracts as traders continue to feel that
the most aggressive global demand pressure will develop in the last
half of 2020. April lean hogs are down $0.27 at $62.27, June lean hogs
are down $0.82 at $77.22 and July lean hogs are down $1.10 at $78.30.
The continued ability for cash hog prices and pork values to remain
generally stable through the end of February is an impressive feat given
widespread moves in futures trade through the end of the month. Pork
cutouts values are unavailable at this time due to reporting delays.
Friday's slaughter is estimated at 486,000 head, 6,000 head less than a
week ago and 3,000 head less than a year ago. Estimated weekly slaughter
is 2.65 million head. The CME lean hog index 2/26/2020: down $0.05,
$56.36.
MONDAY'S CASH HOG CALL: Steady to firm. Limited
direction is expected in cash hog prices as traders return from the
weekend. The need to fuel a full week of aggressive packer activity will
likely keep prices steady to firm.
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