GENERAL COMMENTS:
There's nothing more perfect than when the market trades in harmony with its different components and fundamentals ring true. But, there is nothing more maddening than when the market trades on emotion and lacks fundamental consensus. Tuesday has been one of those days.
Hog prices are lower on the National Direct Afternoon Hog Report, down $0.82 with a weighted average of $53.63. May corn is down 1/2 cent per bushel and May soybean meal is down $4.00. The Dow Jones Industrial Average is down 410.32 points and NASDAQ is down 74.05 points.
LIVE CATTLE:
The problem with volatility is irrational movements in the marketplace are extremely dangerous and, although we would hope that all decisions are meaningful and concise, they aren't.
Let's take Tuesday for example. The board closed considerably higher, cash cattle have yet to trade and boxed beef prices plummeted. Three components that weigh heavily in the cattle market that moved in three different directions. The problem is not that boxed beef prices closed lower or that the board closed higher -- the problem is that the market isn't moving in sync.
April live cattle closed $2.62 higher at $101.82, June live cattle closed $3.00 higher at $92.07 and August live cattle closed $2.97 higher at $93.60. Cash cattle have yet to trade and as of now it looks like everyone's attention is on Wednesday's Fed Cattle Exchange to see how that sale performs and to see what tone it sets for the week. Tuesday's slaughter is estimated at 119,000 head -- 4,000 head less than a week ago and 3,000 head less than a year ago.
Closing boxed beef prices are lower: choice down $7.82 ($243.15) and select down $9.18 ($228.96) with a movement of 104 loads (51.75 loads of choice, 26.21 loads of select, 8.59 loads of trim and 17.59 loads of ground beef). Oh, the records that have been broken throughout the coronavirus frenzy are wild. Just two weeks ago we were sharing record-breaking news that boxed beef prices made the largest jump in one day on March 16, 2020; now Tuesday's (today's) boxed beef prices ring the bell for a new record for the biggest one-day regression. The last time boxed beef prices fell this much in one day was on Jan. 31, 2014, when choice fell $7.26, and on Feb. 2, 2014, when select fell $5.43.
WEDNESDAY'S CASH CATTLE CALL: Steady. It's likely cash cattle will start to trade after the mid-morning Fed Cattle Exchange and really this week could flop either way. If feeders are aggressive and stick together, they could very well push prices higher, especially if the board trades higher again. But with lower boxed beef prices, packers aren't going to want to pay higher prices and will try to get cattle bought cheaper.
FEEDER CATTLE:
Feeder cattle contracts rebounded after the noon hour and successfully closed higher throughout the entire complex. April feeders closed $1.87 higher at $121.92, May feeders closed $2.00 higher at $122.90 and August feeders closed $1.97 higher at $128.90. At Ozark Regional Stockyard in West Plains, Missouri, steer and heifer calves under 700 pounds traded $3.00 to $7.00 higher compared to last week, while lightly tested heavier calves traded $3.00 to $6.00 lower. Lighter weight calves are easier for feeders to buy right now as they have some flexibility with where they can hedge the calves. The CME feeder cattle index 3/30/2020: down $1.47, $131.10.
LEAN HOGS:
Lean hog contracts were able to keep their support throughout the afternoon and closed higher throughout most of the complex. April lean hogs closed $1.75 lower at $52.20, June lean hogs closed $0.55 higher at $60.32 and July lean hogs closed $1.65 higher at $64.72. Pork cutouts totaled 341.11 loads with 317.08 loads of pork cuts and 24.04 loads of trim. Pork cutout values: down $5.67, $65.04. Tuesday's slaughter is estimated at 493,000 head -- 5,000 head less than a week ago and 18,000 head more than a year ago. The CME lean hog index 3/27/2020: down $0.90, $65.56.
WEDNESDAY'S CASH HOG CALL: Lower. The board had some deferred strength throughout the bulk of Tuesday's trade but support for the cash market is hard to muster this week.
 |
| #completeherdhealth |
No comments:
Post a Comment