GENERAL COMMENTS:
Livestock contracts closed mostly lower Friday
afternoon as the coronavirus penetrates even further into the market's
core. Hog prices closed lower on the National Direct Afternoon Hog
Report, down $0.60 with a weighted average of $50.90. May corn is down 5
3/4 cents per bushel and May soybean meal is up $1.20. The Dow Jones
Industrial Average is down 256.50 points and NASDAQ is down 162.98
points.
From Friday to Friday, livestock futures scored
the following changes: April live cattle down $6.95, June live cattle
down $1.18; March feeder cattle down $0.58, April feeder cattle down
$2.65; April lean hogs up $3.65, May lean hogs up $2.35.
LIVE CATTLE:
This week's market -- cattle market especially
-- was utter chaos. The simple fact that boxed beef prices continue to
show some support is a sheer sign that beef demand is excellent and that
nation's people are still consuming and seeking the product. One of my
favorite things to do when grocery shopping is to walk slowly through
the meat section and see how many packages are marketed down. Just this
last week I visited two major outlets in my hometown, Walmart and
Albertsons, and neither one of them had protein cuts that was
discounted. Yet, the April live cattle market found a new contract low
Friday afternoon.
When the market traded on nothing more than
emotion -- times get tough and people get burned. Nearby live cattle
contracts suffered more than deferred, although both saw significant
position lost. April live cattle closed $2.90 lower at $105.75, June
live cattle closed $2.62 lower at $100.02 and August live cattle closed
$2.70 lower at $101.07. Friday's cash trade was largely clean up in
nature. Friday's slaughter is estimated at 119,000 head, 4,000 head more
than a week and year ago. Saturday's kill is expected to be around
38,000 head.
Boxed beef prices close higher: choice up $0.22
($207.47) and select up $1.51 ($202.57) with a movement of 103 loads
(55.80 loads of choice, 8.82 loads of select, 17.57 loads of trim and
20.64 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady. If the board
creeps lower again next week it wouldn't be surprising to see cash
prices follow. If the board can hold steady or increase, the market
could see some profits restored, but given the mental toll the virus has
had on producers, it's going to take a while for folks to trust the
market. But given that this week's trade was only on a moderate scale,
packers will have to show some interest with grilling season right
around the corner.
FEEDER CATTLE:
Feeder cattle contracts finished the week off
significantly lower, almost rivaling last Friday's low. March feeders
closed $2.92 lower at $130.70, April feeders closed $3.60 lower at
$130.05 and May feeders closed $3.30 lower at $131.15. At Tama Livestock
Feeder Cattle Special in Tama, Iowa, there was a special preconditioned
feeder cattle sale, and when compared to last week, feeder steers
weighing 400 to 699 pounds sold $2.00 to $9.00 higher, steers weighing
700 to 900 pounds sold $2.00 to $7.00 lower. Feeder heifers weighing 400
to 599 pounds sold $2.00 to $7.00 higher, heifers weighing 600 to 800
pounds sold $2.00 to $5.00 lower. The CME feeder cattle index for
3/5/2020: up $0.04, $133.87.
LEAN HOGS:
The lean hog complex was the only livestock
sector able to close the day remotely higher. Nearby contracts closed
$0.15 to $0.55 higher while deferred contracts closed $0.05 to $0.80
lower. April lean hogs closed $0.55 higher at $65.92, June lean hogs
closed $0.37 higher at $79.75 and July lean hogs closed $0.30 higher at
$80.95. Friday's slaughter is estimated at 493,000 head, 7,000 head more
than a week ago and 22,000 head more than a year ago. Saturday's kill
is estimated around 207,000 head. Pork cutouts totaled 333.58 loads with
305.79 loads of pork cuts and 27.79 loads of trim. Pork cutout values:
down $0.18, $66.86. The CME lean hog index 3/4/2020: $up $0.33, $56.79.
MONDAY'S CASH HOG CALL: Steady. Unfortunately,
the market isn't trading on fundamentals but rather off of the hype and
emotional pull.
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