Friday, March 27, 2020

Friday Closing Livestock Market Summary - Livestock Contracts Head Into the Weekend Disappointed

GENERAL COMMENTS:
Heading into the weekend doesn't leave livestock enthusiasts many warm and fuzzy feelings as the board closed sharply lower and the havoc of the coronavirus doesn't seem to be lessening. Hog prices are lower on the National Direct Afternoon Hog Report, down $0.77 with a weighted average of $58.07. May corn is down 2 3/4 cents per bushel and May soybean meal is up $0.20. The Dow Jones Industrial Average is down 493.99 points and NASDAQ is down 151.46 points.
From Friday to Friday, livestock futures scored the following changes: April live cattle up $2.30, June live cattle down $0.10; April feeder cattle down $0.12, May feeder cattle up $2.68; April lean hogs down $3.13, June lean hogs down $3.70.

LIVE CATTLE:
The market's swings throughout the whirlwind of the coronavirus have been baffling. Last week boxed beef prices and cash prices couldn't have been anymore of polar opposites as boxed beef prices made historical leaps and the live cattle market closed limit lower multiple times throughout the week. Fast forward to this last week, the board charged into Monday with ambition and a desire to regain lost ground, cash cattle prices jumped $10.00 but then board gave way towards the later part of the week and ultimately fell back below Monday's open. These types of market swings are a cattleman's worse nightmare as they undermine how the market was intended to work.

Live cattle contracts closed the week on a disappointing note as the market fell to prices lower than Monday's initial open. April live cattle closed $4.50 lower at $100.95, June live cattle closed $4.12 lower at $89.42 and August live cattle closed $4.02 at $90.45. Driving support and interest seems to be half of the market's struggles as open interest continues to dwindle and prices follow the vicious, volatile highs and lows.

Friday's cash cattle trade didn't amount to much as most of the week's business was already taken care of. Sales this week in the South traded $116 to $122, $9.00 to $10.00 higher than the previous week. And cattle in the North traded from $180 to $191, roughly $17 higher than last week's weighted average. Friday's slaughter is estimated at 117,000 head, 8,000 head more than a week ago and 10,000 head more than year ago. Saturday's kill is projected to be around 75,000 head.

Boxed beef prices closed mixed: choice down $0.73 ($252.84) and select up $0.21 ($242.38) with a movement of 124 loads (72.72 loads of choice, 10.68 loads of select, 19.30 loads of trim and 21.38 loads of ground beef).

MONDAY'S CASH CATTLE CALL: Good guess. Next week is going to be a tough one. Cash cattle prices were higher this week, but if the board continues to trade lower, it wouldn't be surprising to see this week's advancements lost.

FEEDER CATTLE:
Feeder cattle contracts closed the week limit lower throughout the entire complex. April feeders closed $4.50 lower at $120.60, May feeders closed $4.50 lower at $120.92 and August feeders closed $4.50 lower at $127.10. At Blue Grass Stockyards in Stanford, Kentucky, compared to last week, feeder steers sold $10.00 to $15.00 higher with some instances of $20.00 higher. Feeder heifers sold $7.00 to $10.00 higher with some instances of $15.00 higher. Slaughter cattle continue to sell with extremely high demand as slaughter cows sold $3.00 to $5.00 higher and slaughter bulls sold $2.00 to $4.00 higher. The CME feeder cattle index 3/26/2020: up $1.94, $130.44.

LEAN HOGS:
Nearby lean hog contracts took full use of the expanded limits while the rest of the deferred contracts closed $2.32 to $3.80 lower. April lean hogs closed $4.45 lower at $58.45, June lean hogs closed $4.50 lower at $64.25 and July lean hogs closed $3.80 lower at $66.80. Pork cutouts total 339.93 loads with 306.22 loads of pork cuts and 33.71 loads of trim. Pork cutout values: down $1.42, $77.61. Friday's kill is estimated at 489,000 head, 1,000 head less than last week but 25,000 head more than a year ago. Saturday's kill is expected to be around 275,000 head. The CME lean hogs index 3/25/2020: up $1.02, $66.17.


MONDAY'S CASH HOG CALL: Steady. With packers needing readily available hogs, the cash market should stay steady with demand as strong as it is.


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