GENERAL COMMENTS:
If there's one thing I hope you're doing this weekend, I hope that you're eating beef or pork for your Easter best. While prices bounce back and forth on the board and throughout the countryside, demand can help clear the muddy waters and incentivize packers to keep processing. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.38 with a weighted average of $39.96. May corn is up 1 3/4 cents per bushel and May soybean meal is down $0.30. The Dow Jones Industrial Average is up 285.80 points and NASDAQ is up 62.68 points.
LIVE CATTLE:
Live cattle contracts wrapped up the week in a disappointing fashion, settling lower after the beginning of the week progressed higher. April live cattle closed $1.17 higher at $94.00, June live cattle closed $2.30 lower at $84.37 and August live cattle closed $1.45 lower at $90.75. Regardless of how you feel about the coronavirus, there's no denying that it's had a massive toll on the markets and continues to jeopardize the livestock contracts. The fact that the June contract is trading for $84.37 is baffling.
While the board trades back and forth, cash cattle prices and packing plant productivity have fallen. As the week wraps up, Thursday amounted to really nothing on the cash cattle side of things as the day was at an utter standstill. Cattle that traded earlier in the week traded mostly live at $105; $4.00 lower than last week's average, and dressed cattle sold for $168, $6.00 lower than last week's weighted average.
Boxed beef prices closed mixed: choice up $0.33 ($222.67) and select down $4.20 ($207.57) with a movement of 160 loads (115.76 loads of choice, 31.96 loads of select, 4.43 loads of trim and 8.08 loads of ground beef). Thursday's slaughter is estimated at 99,000 head, 16,000 head less than a week ago and 13,000 head less than a year ago.
MONDAY'S CASH CATTLE CALL: Lower. Monday is a long time away, and given the current uncertainty of our world, there's so much that can change. But until packers can be at normal processing speeds, the cash market is going to most likely be lower.
FEEDER CATTLE:
Feeder cattle contracts closed the day halfheartedly. The complex wasn't fully sold on trading higher but the pressure from the other contracts pulled the market lower as traders checked out early for the holiday weekend. April feeders closed $0.35 lower at $119.52, May feeders closed $0.42 lower at $118.95 and August feeders closed $1.32 higher at $128.87.
At Mitchell Livestock Auction in Mitchell, South Dakota, compared to last week, light feeder steers were dollars higher on a light test. Steers 650 to 900 pounds were $4.00 to $10.00 higher. Light feeder heifers were unevenly steady at $1.00 to $4.00 higher. Heifers 800 to 950 pounds were $3.00 to $4.00 higher. Demand was good as a lot of the offering was in load lot increments. The CME feeder cattle index 4/8/2020: down $1.82, $114.97.
LEAN HOGS:
Around the noon hour we heard that the Smithfield pork processing plant in Sioux Falls, South Dakota, announced that it will be closing temporarily for cleaning after there have been 80 confirmed cases with plant employees. The plant intends to close some of its production Saturday, and then be completely shutdown both Sunday and Monday so that the premises can be cleaned and sanitized. Thankfully, the Department of Agriculture said that there has been no evidence that the coronavirus is being transmitted through food or its packaging. However, the thought is having a spiral effect as Governor Walz from Minnesota is preparing to test food facilities for the virus as well.
Our biggest fear seems to be inching closer and closer: what if they shut the plants down? Packers have already started to scale back on production as cash buyers from the beef and pork sectors have been quieter than usual this week. As we all continue to watch and monitor the situation, its important that we also consider how well pork exports are doing and understand that it's vital that we continue to offer food to both our domestic and international markets.
Earlier Thursday morning the pork export notice shared that pork net sales of 55,900 mt were reported for 2020; chiming in with a new marketing year high as figures were up 47% from the previous week and up significantly from the prior four-week average. The three main increases were primarily from China 38,700 mt, Mexico 6,600 mt, and Japan 3,900 mt.
The lean hog complex had a lower, mostly uneventful day on the board. April lean hogs closed $0.32 lower at $42.80, June lean hogs closed $2.77 lower at $48.67 and July lean hogs closed $2.10 lower at $54.75. Pork cutouts total 435.22 loads with 359.80 loads of pork cuts and 75.41 loads of trim. Pork cutout values: down $0.34, $51.07. Thursday's slaughter is estimated at 472,000 head, 16,000 head less than a week ago and 41,000 head more than a year ago. The CME lean hog index 4/7/2020: down $2.55, $52.97.
MONDAY'S CASH HOG CALL: There's a lot of water to go under the bridge before Monday, but at this rate with the plants slowing progress it's safe to assume cash prices will be lower.
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