GENERAL COMMENTS:
The new week has folks hopeful that cash markets may be able to push prices higher, and Monday's closing of fully limit higher prices boosts that momentum. Cash hog prices closed substantially higher on the National Direct Afternoon Hog Report, up $1.08 with a weighted average of $57.41. May corn is down 1/4 cent per bushel and May soybean meal is up $8.40. The Dow Jones Industrial Average is down 582.05 points and NASDAQ is down 18.85 points.
LIVE CATTLE:
It's going to be a week worth watching. Cash prices are anticipated to be upwards of $120 and feeders are thus far rallying together to make it happen. The board closed fully higher, taking full advantage of the $3.00 gains. With the market opening into expanded limits, the marketplace will be tested as the short-term norm has been to trade one-day higher and then one-day lower. April live cattle closed $3.00 higher at $101.65, June live cattle closed $3.00 higher at $92.52 and August live cattle closed $3.00 higher at $93.75. The market is pulling some live cattle contracts finally above $100, but there is still a tremendous amount of ground to be recovered before the market heads into the heat of summer. There were some cattle that traded Monday afternoon at $185, $5.00 higher than last week's weighted average, but for the most part feeders passed on the offer and are holding out for more.
Boxed beef prices closed mixed: choice up $3.88 ($253.75) and select down $0.89 ($240.17) with a movement of 147 loads (58.28 loads of choice, 22.98 loads of select, 29.06 loads of trim and 36.44 loads of ground beef). Monday's slaughter is estimated at 116,000 head, steady with a week ago and 3,000 head less than a year ago.
TUESDAY'S CASH CATTLE CALL: Higher. I think it's fair to say that feeders see that there's an opportunity to gain some leverage back into the marketplace here in the next little while and they don't plan to squander that opportunity.
FEEDER CATTLE:
Closing the day fully higher, feeder cattle contracts will have the opportunity to trade into expanded limits come Tuesday morning. The market has been caught in a one-day higher, one-day lower trading range so it will be interest to see if the current habit will break loose sometime Tuesday or bear lower and undermine Monday's progress. Sale barn owners have mentioned that feeder cattle interest has been excellent as feedlots look to fill their pens. Feeder cattle markets are still too lightly tested to really develop an accurate market, but of the reports showing some data, higher undertones are developing. The CME feeder cattle index 3/20/2020: down $5.23, $116.15.
LEAN HOGS:
Hog contracts didn't close fully limit higher, but the complex was able to close $0.50 to $3.00 higher and the cash market closed $1.08 higher; it still was a phenomenal day. April lean hogs closed $3.00 higher at $64.57, June lean hogs closed $3.00 higher at $70.95 and July lean hogs closed $2.65 higher at $73.02. Pork cutouts totaled 441.74 loads with 408.21 loads of pork cuts and 33.53 loads of trim. Pork cutout values: up $3.47, $83.51. Monday's slaughter is estimated at 497,000 head, steady with a week ago and 18,000 head more than a year ago. The CME lean hog index 3/19/2020: up $0.85 at $62.18.
TUESDAY'S CASH HOG CALL: Steady. Seeing that the market made significant advancement Monday may mean that packers simply sit steady. It would be surprising to see drop back down with cutout prices being as elevated as they are all while packers focus on quick chain speeds.
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