GENERAL COMMENTS:
Thursday has come and gone, and after a couple of higher trading days, the board closed lower in all three livestock markets. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.12 with a weighted average of $58.89. May corn is up 1/4 cent per bushel and May soybean meal is up $1.20. The Dow Jones Industrial Average is up 1,351.62 points and NASDAQ is up 413.24 points.
LIVE CATTLE:
Live cattle contracts followed suit with the rest of the complex and closed fully lower. April live cattle closed $3.00 lower at $105.45, June live cattle closed $2.77 lower at $93.55 and August live cattle closed $2.70 lower at $94.47. Thankfully the bulk of this week's cash cattle trade happened before the board weakened and it looks like the majority of this week's trade is done. There was another light round of trade in parts of the North for steady/slightly lower prices than Wednesday's trade.
Boxed beef prices close lower: choice down $1.73 ($253.57) and select down $0.92 ($242.17) with a movement of 111 loads (43.85 loads of choice, 38.61 loads of select, 7.66 loads of trim and 20.88 loads of ground beef). Thursday's slaughter is estimated at 123,000 head, 8,000 head more than a week ago and 5,000 head more than a year ago.
FRIDAY'S CASH CATTLE CALL: Steady. Seeing that the bulk of the week's trade is done, cattle that are left to sell will most likely trade within the already established prices for the week.
FEEDER CATTLE:
Feeder cattle contracts pushed close to hitting the day's limit but only closed limit lower in the deferred; the January 2021 contract, all other contracts closed $3.25 to $4.27 lower. April feeders closed $3.62 loads at $125.10, May feeders closed $3.67 lower at $125.42 and August feeders closed $3.50 lower at $131.60. And despite the feeder cattle board being significantly lower, sale barns have sold on and have continued to have great sales following last week's weaker market. At Winter Livestock in Pratt, Kansas, compared to last week, feeder steers sold mostly $8.00 to $10.00 higher with instances of $14.00 to $18.00 higher. Heifers sold mostly $2.00 to $3.00 higher. The CME feeder cattle index 3/25/2020: up $5.06, $128.50.
LEAN HOGS:
Thursday ended up being a big headline day for the lean hog market as the weekly export report showed phenomenal pork demand and the quarterly USDA hogs and pigs report was shared. The board; however, closed limit lower in a handful of contracts as mustering-up support for the livestock contracts continues to be an issue affecting prices. April lean hogs are down $2.95 at $62.90, June lean hogs are down $3.00 at $68.75 and July lean hogs are down $3.00 at $70.60. Pork cutouts totaled 339.93 loads with 306.22 loads of pork cuts and 33.71 loads of trim. Pork cutout values: down $1.42, $77.61. Thursday's slaughter is estimated at 497,000 head - 3,000 head more than a week ago and 12,000 head more than a year ago. The CME lean hog index 3/24/2020: up $1.14, $65.12.
The hogs and pigs report shared that the all hogs sector was up 4% from 2019, hogs kept for breeding was steady with 2019 figures and hogs kept for marketing was up 4% as well. The big take away from the report was that the industry hasn't seen this many hogs around the countryside since the late 1990s. It will be crucial for the hog industry to continue to export and harvest at vigorous speeds. It's fairly safe to assume that amid the COVID-19 storm, demand and packer productivity will stay elevated. But the real question is how will producers manage their herds knowing China is rebuilding its herd and demand domestically and internally could change once the COVID-19 virus has run its course.
Pork net sales of 38,600 were reported for 2020 which was up 8% from the previous week and up 89% from the prior four-week average. The three largest increases were from Mexico (11,100 mt) China (9,500 mt) and Japan (9,400 mt).
FRIDAY'S CASH HOG CALL: Steady. Seeing that the board is lower, and the pressure is limiting how the market excel will affect the moral of the marketplace. However, packers are processing hogs are rapid speeds and will need to continue to do so -- so they aren't going to be able to step back and not buy.
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