GENERAL COMMENTS:
Another volatile day of trade in livestock markets Friday with early buyer support quickly evaporating as underlying bearish factors took hold and pulled prices lower. Cash cattle trade remained undeveloped, leaving overall trade volumes limited for the week and creating questions of packers' intentions early next week. Hog prices are $1.70 per cwt lower at $42.88 per cwt on the National Direct Afternoon Hog Report. May corn is down 2 3/4 cents per bushel and May soybean meal is down $5.90. The Dow Jones Industrial Average is down 413.56 points and NASDAQ is down 158.25 points.
Week ending: 4/3/20: From Friday to Friday livestock futures scored the following changes: Apr LC off $12.63 Jun LC off $8.57; Apr FC off $12.35 May FC off $12.83; Apr LH off $18.23 Jun LH off $15.93
LIVE CATTLE:
A glimmer of hope developed early Friday morning with moderate to firm buying interest in cattle futures. But the depth of buyer support was quickly overshadowed by returning bearishness and active pressure in nearby contracts. Even though deferred live cattle futures were able to etch out light to moderate gains due to limited volume, spot April's $4.50 per cwt losses quickly knocked the wind out of the cattle market. This, combined with reports late Friday that positive Covid-19 cases were reported at the JBS beef packing plant in Grand Island, Nebraska, could create additional shock waves through the market early next week. April live cattle closed $4.50 lower at $88.32, June live cattle closed $2.22 lower at $80.85 and August live cattle closed $0.30 lower at $84.30.
Cash cattle still remain quiet Friday afternoon with bids generally undeveloped. Some activity may trickle in late afternoon or early evening, but for now, markets are inactive following some light trade seen at midweek. Overall weekly totals are expected to remain extremely low, but given the collapse in market structure, all players are willing to hold out until early next week at this point. Cash trade this week fell $5 to $9 per cwt from last week's levels. Friday's slaughter is estimated at 107,000 head -- less than a week ago and even with a year ago.
Boxed beef prices lower: choice down $2.20 ($230.44) and select down $6.28 ($215.84) with a movement of 110 loads (37.22 loads of choice, 12.67 loads of select, 45.32 loads of trim and 14.89 loads of ground beef). Significant pressure in select beef cutouts Friday added increased underlying weakness to the entire market as concerns of demand erosion due to limited food service activity could further cut into beef usage.
MONDAY'S CASH CATTLE CALL: Steady. Given the fact that cash trade remained sluggish most of the week, the potential for purchases early next week to fill plant orders could spark interest Monday. The need for packers to secure market-ready cattle could help stabilize the market, while feeders look for an end to the price freefall in the upcoming days.
FEEDER CATTLE:
Mixed trade developed early Friday morning, helping to break the trend to shift markets sharply lower seen over the last couple of days. However the early support could not last as nearby futures led the complex to triple-digit losses. April feeders closed $2.42 lower at $108.25, May feeders closed $3.55 lower at $108.10 and August feeders closed $3.22 lower at $114.42. The CME feeder cattle index 4/2/2020: not available at this time.
LEAN HOGS:
Buying in deferred lean hog futures did little to support the entire complex with nearby contracts closed either at or near expanded limit losses by the end of the session. April futures missed the trading limit by 3 cents per cwt, but this move will prevent expanded trading limits Monday in lean hog trade even though June and July futures posted $4.50 per cwt losses. This could add even more market volatility early next week as traders look for additional direction in pork demand. April lean hogs closed $4.47 lower at $40.22, June lean hogs closed $4.50 lower at $48.32 and July lean hogs closed $4.50 lower at $52.72. Pork cutouts totaled loads 403.45 with 368.86 loads of pork cuts and 34.59 loads of trim. Pork cutout values: down $1.84, $57.37. Thursday's slaughter is estimated at 483,000 head -- 6,000 head less than a week ago and 63,000 head more than a year ago. The CME lean hog index 4/1/2020: down $1.38, $63.08.
MONDAY'S CASH HOG CALL: Steady. The hope that the weekend break will help create some distance from the aggressive losses over the last few days, could spark some much needed stability in cash and futures trade.
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