GENERAL COMMENTS:
Midweek pressure pulled all three livestock contracts lower despite having a strong open to the week's initial trade. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.19 with a weighted average of $59.02. May corn is up 1 1/4 cents per bushel and May soybean meal is down $10.40. The Dow Jones Industrial Average is up 495.64 points and NASDAQ is down 33.56 points.
LIVE CATTLE:
The one conversation cattlemen from every side of the spectrum seem to be having is in regards to how will boxed beef demand hold. Wednesday afternoon's boxed beef prices closed lower and many are concerned that in time the demand will fade. But there are a couple of things that we need to remember when "chewing-the-fat" on these matters. This is the first time in a very long time that household are preparing, cooking and eating most of their own meals. With restaurants closed, and fast food establishments being the only quick and easy option, Americans are left with no other choice but to serve their own plates. And it's not like most Americans are hording frozen meat, most households don't have additional freezer space, so the meat that is being bought it being consumed within a short matter of time. Thankfully, through the COVID-19 headache, boxed beef demand has been phenomenal and shines as another testament that when Americans buy, they buy beef!
Live cattle contracts closed lower and subsided to midmorning pressure which drew prices lower. April live cattle closed $0.57 lower at $65.85, May live cattle closed $0.75 lower at $65.12 and June live cattle closed $1.25 lower at $71.75. A light to moderate trade developed in most areas with Southern dressed deals at mostly $120, $10 more than last week's weighted averages. Northern dressed business was at mostly $190, $17 lower than last week's weighted average, basis Nebraska. Wednesday's slaughter is estimated at 122,000 head, steady with a week ago and 1,000 hear more than a year ago.
Boxed beef prices closed lower: choice down $1.01 ($255.30) and select down $2.39 ($243.09) with a movement of 149 loads (72.24 loads of choice, 20.45 loads of select, 21.38 loads of trim and 35.09 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Higher. The momentum throughout the countryside remains strong and should carry into the later part of the week regardless what the board does.
FEEDER CATTLE:
Feeder cattle prices closed the day fully lower except for in the soon expiring March 2020 contract, which is set to expire Thursday. April feeders closed $1.35 lower at $128.72, May feeders closed $0.40 lower at $129.10 and September feeders closed $0.80 lower at $135.32. At OKC West Livestock Auction in El Reno, Oklahoma, feeder steers and heifers sold in comparison to last week $10.00 to $20.00 higher, with instances of $25.00 higher. Steer and heifer calves were not well tested but stronger undertones were noted. Even though the board traded lower throughout the day, feedlots were still interested in getting feeders bought and some folks are looking for cattle to put out on grass. Slaughter cows at OKC West sold $5.00 to $15.00 higher, and slaughter bulls sold $8.00 to $10.00 higher as packers need beef to fill immediate kill needs. The CME feeder cattle index 3/24/2020: up $5.21, $123.44.
LEAN HOGS:
Lean hog contracts closed fully lower, unenthused with the day as trader's interest diminished. April lean hogs closed $0.57 lower at $65.85, June lean hogs closed $1.25 lower at $71.75 and July lean hogs closed $1.10 lower at $73.60. Pork cutouts totaled 325.31 loads with 292.04 loads of pork cuts and 33.28 loads of trim. Pork cutout values: down $3.02, $79.03. Wednesday's slaughter is estimated at 498,000 head, steady with a week ago and 12,000 head more than a year ago. The CME lean hog index 3/23/2020: up $0.80, $63.98.
THURSDAY'S CASH HOG CALL: Steady. Seeing that there was some pressure lying on the livestock complex and that pork cutout prices are weaker, it doesn't give producers a whole lot of leverage heading into Thursday morning's trade. However, as the need for meat continues to be at the forefront of everyone mind, packers will still have to stay engaged in the market.
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