GENERAL COMMENTS:
Livestock contracts blew the whistle and closed Tuesday fully higher -- which extends our question from Monday into Wednesday -- will the strength continue or will the volatile wake of the market's recent trade take over? Hog prices are lower on the National Direct Afternoon Hog Report, down $0.69 with a weighted average of $41.07. May corn is up 3 3/4 cents per bushel and May soybean meal is down $3.20. The Dow Jones Industrial Average is down 26.13 points and NASDAQ is down 25.98 points.
LIVE CATTLE:
The board closed higher in the live cattle contracts, but it was unable to spark positive interest in the early cash trade of the week. April live cattle closed $4.50 higher at $88.32, June live cattle closed $4.50 higher at $84.80 and August live cattle closed $4.50 higher at $89.32. The disappointing part of the market's current win is on the cash cattle side of the spectrum. A light trade developed in parts of Kansas, Nebraska and Texas Tuesday afternoon all at $105, $4.00 lower than last week's weighted averages. There is a big offering at Wednesday's Fed Cattle Exchange where 7,561 head will be marketed.
The cattle industry currently faces the struggle of packing plant productivity. Tuesday there was 13,000 head less harvested than a week ago. But the negative side effects of not vigorously processing cattle at this point in time are twofold. First, it obviously affects the current trade as packers don't actively seek as many cattle. Secondly, in regard to supply and staying current within the market, moving forward having a surplus of readily-available fat cattle is a major concern with feeding conditions being prime for excellent gains.
Boxed beef prices closed mixed: choice down $2.17 ($227.88) and select up $2.72 ($217.75) with a movement of 162 loads (81.76 loads of choice, 25.30 loads of select, 16.11 loads of trim and 38.75 loads of ground beef). Tuesday's slaughter is estimated at 106,000 head, 13,000 head less than a week ago and 15,000 head less than a year ago.
WEDNESDAY'S CASH CATTLE CALL: Lower. Until packers can amp up production and have full shifts of workers present, lower money is probably insight.
FEEDER CATTLE:
Feeder cattle contracts closed fully higher, up the limit throughout the complex. April feeders up $4.50 at $114.92, May feeders up $4.50 at $113.80 and August feeders up $4.50 at $121.00. At Ozark Regional Stockyards in West Plains, Missouri, compared to last week, steer valves under 500 pounds traded steady to $5.00 lower with heavier weights $7.00 to $10.00 lower. Heifer calves traded $4.00 to $8.00 lower. With the live cattle and feeder cattle futures both up the limit there was some optimism in the cash market but given the board's volatility marketing feeder cattle is still an issue. The CME feeder cattle index 4/6/2020: down $2.33, $117.05.
LEAN HOGS:
The lean hog market followed suit and closed almost fully limit higher except in a couple deferred months. April lean hogs up $3.00 at $44.12, June lean hogs up $3.00 at $52.65 and July lean hogs up $3.00 at $57.77. Tuesday morning the cash market was slightly strong, but enthusiasm on the cash side dwindled into the afternoon as cash prices closed lower. Pork cutouts totaled 439.80 loads with 387.89 loads of pork cuts and 51.91 loads of trim. Pork cutout values: down $2.96, $54.73. Tuesday's slaughter is estimated at 482,000 head - 11,000 head less than a week ago and 4,000 head more than year ago. The CME lean hog index 4/3/2020: down $3.00, $57.65.
WEDNESDAY'S CASH HOG CALL: Lower. The market's current weakness comes from the packers and their ability to process. If they could work out their employee issues and run at full speed, cash prices would most likely be able to take advantage of this stronger board.
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