GENERAL COMMENTS:
It was a mixed day for the livestock complex as the feeder cattle market closed higher but both the live cattle and lean hog contracts closed slightly lower. As traders look at the marketplace, they want to see strong fundamental backing before they help move the market any higher and risk their own positions. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.33 with a weighted average of $100.54 on 5,108 head. May corn is down 8 1/4 cents per bushel and May soybean meal is up $0.70. The Dow Jones Industrial Average is down 55.20 points and NASDAQ is down 50.18 points.
LIVE CATTLE:
It was a tough day for the live cattle contracts as the market aspired to trade higher but simply couldn't find the technical backing to do so. After rolling out of last week's stellar cash cattle market, feedlots are anxious to see the same kind of rally in this week's market but know that stronger prices are usually summoned with a healthy dose of patience. April live cattle closed $0.70 lower at $122.72, June live cattle closed $0.47 lower at $122.10 and August live cattle closed $0.45 lower at $121.95. The cash cattle market was quiet but that's expected for Monday. Looking to the later part of the week, packers will start to show some interest in cattle, and if boxed beef prices can keep a steady to somewhat higher progression, then packers will most likely be willing to pay more as their profit levels continue to be supported by end-consumers. Monday's slaughter was disappointing in its volume, as the day's slaughter is estimated at 112,000 head, 7,000 head more than a week ago and 24,000 head more than a year ago.
Boxed beef prices closed mixed: choice down $0.76 ($271.41) and select up $2.09 ($266.16) with a movement of 112 loads (68.75 loads of choice, 9.56 loads of select, 22.07 loads of trim and 11.45 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: HIGHER. With supplies tight due to the oddity of placements last year, the cash cattle market has a window of opportunity as demand is strong and supplies are tight for this time.
FEEDER CATTLE:
Before Monday closed, the feeder cattle contracts fought vigorously to trade higher and felt like the day was going to be wasted if they didn't close higher amid the lower prices seen in the corn market. Feeder cattle contracts could have closed stronger if the live cattle market would have been supportive in its trade, but without seeing higher live cattle prices the feeder cattle contracts felt best playing the day safe and closed only modestly higher. April feeders closed $0.25 lower at $144.50, May feeders closed $0.07 higher at $149.70 and August feeders closed $0.62 higher at $160.57. On Friday at Ft. Pierre, South Dakota, compared to the previous sale, steers weighing 450 to 699 pounds sold $4.00 to $6.00 stronger and steers weighing 700 to 849 pounds sold steady to $2.00 higher. Feeder heifers weighing 500 to 749 pounds sold $2.00 to $4.00 stronger. The sale saw strong demand throughout the day's offering and buyers were aggressive on all the lots from lighter weight grass cattle to heavier, hay fed calves; buyers were lined up and willing to buy whatever came through the ring. The CME Feeder Cattle Index for April 9: up $1.45, $143.36.
LEAN HOGS:
The lean hog complex didn't have a rip-roaring Monday but, in past weeks, traders have been hesitant to support the complex too much before seeing where the market's fundamentals point to early in the week. The cash hog market closed higher yet again and the day's slaughter was aggressive, but both were also accompanied by a weaker pork cutout close. As the market tries to balance limited supplies and stellar demand, seeing these type of price swings isn't necessarily unusual and will most likely be how the market continues to trade given the circumstances of tight supplies and limited volumes. Meanwhile, the lingering question still floats all throughout the marketplace, where is the top? And how will the market trade after the top is established? Pork cutouts totaled 289.15 loads with 261.62 loads of pork cuts and 27.53 loads of trim. Pork cutout values: down $3.07, $110.10. Monday's slaughter is estimated at 494,000 head, 169,000 head more than a week ago and 188,000 head more than a year ago. Friday's hog slaughter was revised to 468,000 head and Saturday's hog slaughter was revised to 184,000 head. The CME Lean Hog Index for April 8: up $0.43, $101.37.
TUESDAY'S CASH HOG CALL: Steady to somewhat higher. With supplies being as tight as they are, packers will most likely continue to support the cash market as securing inventory remains crucial.
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