GENERAL COMMENTS:
Released from the influence of wildly swinging feed prices on a relatively quiet Friday (so far), the livestock futures markets have been free to post small recoveries in a moderate volume of trading activity. May corn is down 10 3/4 cents per bushel and May soybean meal is down $10.80 per ton. The Dow Jones Industrial Average is down 71 points and NASDAQ is down 74 points.
LIVE CATTLE:
Live cattle futures are mixed across the board Friday morning, with no April Fools' Day pranks yet to startle the charts. The April futures contract is down $0.375 at $139.00, the June contract is down $1.075 at $136.05, and the August contract is down $0.70 at $137.375. Seasonally recovering beef prices have been keeping packers' attention on maintaining a steady throughput. Friday's cattle slaughter is projected at 117,000 head, which is 3,000 more than week-ago numbers and 13,000 more than year-ago numbers, to be followed by an estimated 44,000 head in the Saturday slaughter. To keep these animals coming through April, the cash market paid up a little this week: light Thursday trade in the North included dressed deals marked from $219 to $228, generally $222 to $225, or roughly $1 to $4 higher than last week's weighted average basis Nebraska. Southern live trade this week has been marked at mostly $138, fully steady with the bulk of last week's business. More cleanup trade may be seen Friday afternoon.
Boxed beef prices are mixed: choice down $0.96 Friday morning ($267.43) and select up $0.71 ($263.05) with a movement of 75 total loads (57.21 loads of choice, 2.98 loads of select, 7.44 loads of trim, and 7.26 loads of ground beef).
FEEDER CATTLE:
The April feeder cattle contract takes over as the front-month Friday, currently unchanged at $161.40, but other contracts have seen some triple-digit losses. The May is down $0.075 at $166.475, and farther out, the October is down $0.95 at $180.875. Nothing is great from the input perspective for cattle operations: nearby corn prices are still trading around $7.50 per bushel, DDGs are anywhere from $275 per ton to over $300 per ton in Kansas and Nebraska, and spring grazing prospects are still deeply concerning across the entire droughty West. Nevertheless, there is market power in the low supplies of eagerly demanded feeder calves through the foreseeable future, because ultimately downstream, grocery shoppers are more than willing to pay over $5 per pound for 80% lean ground beef.
LEAN HOGS:
The highest-priced July lean hog contract hit a fresh contract high Thursday at $126.95, but then collapsed to close more than $6 lower than that level. So, Friday's mild gains to very little to recover the once-exuberantly bullish tone. The April lean hog futures contract is down $0.25 at $101.50, the May is down $0.30 at $113.275, and the June is up $0.025 at $120.65. Volatility continues to reign in wholesale ham and belly values, which makes it a little tricky to properly assess the overall direction of pork trade, which may face some headwinds from a strengthening U.S. dollar. Friday's hog slaughter is projected at 473,000 head, which is 1,000 fewer than week-ago numbers and down 24,000 from a year ago. Saturday's slaughter is projected at 62,000 head, which would be 5,000 more than last Saturday and 6,000 more than year-ago numbers.
The CME Lean Hog Index from 3/30 was 103.13 (down $0.53) and the projected index for 3/31 is 102.63 (down $0.50). Pork cutouts Friday morning total 121.05 loads with 103.85 loads of pork cuts and 17.20 loads of trim. Pork cutout values: down $1.62, to $106.10.
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