GENERAL COMMENTS:
The livestock complex closed in a mixed manner as most of the cattle contracts closed lower on fears of higher corn prices, but the lean hog complex rallied through Friday's end as traders stumbled into technical support. Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.30 with a weighted average of $68.96 on 4,797 hogs. May corn closed up 14 at $6.663 and May soybean meal closed down $3.90 at $459.7. The Dow Jones Industrial Average is down 143.22 at 33,886.47.
From Friday to last Thursday the livestock futures scored the following changes: April live cattle up $3.68, June live cattle up $0.63; April feeder cattle up $2.78, May feeder cattle up $2.50; April lean hogs down $2.40, June lean hogs down $1.30; May corn up $0.23, July corn up $0.16.
LIVE CATTLE:
The live cattle complex closed lower as traders opted to focus on the market's technical leeriness as opposed to focusing on its strong fundamental basis of tight supplies and excellent demand. The corn market's $0.06 to $0.11 rally didn't help matters either as traders were already playing their cards cautiously. On Monday, it will be incredibly important to seek out the USDA's report, which shares how the cattle bought in the previous week were committed for delivery (I will share it in both Monday's midday and closing comments). Packer's ability to build inventory in their deferred delivery option is a threat to the cash cattle market's ability to keep rallying.
April live cattle closed $0.75 lower at $174.75, June live cattle closed $0.78 lower at $163.725 and August live cattle closed $0.55 lower at $162.7. Friday's slaughter is estimated at 112,000 head, 7,000 head more than a week ago and 2,000 head less than a year ago. Saturday's kill is projected to be around 12,000 head. This week's slaughter is estimated at 613,000 head, 10,000 head more than a week ago and 25,000 head more than a year ago.
Throughout the week, Northern dressed deals have ranged from $283 to $290, but mostly at $290, which is $11.00 higher than last week's weighted average. Southern live cattle have traded for $170 to $180, but mostly at $175, which is $5.00 higher than last week's weighted average.
Boxed beef prices closed higher: choice up $2.20 ($302.62) and select up $0.49 ($283.87) with a movement of 80.35 loads (58.58 loads of choice, 7.37 loads of select, 7.51 loads of trim and 6.89 loads of ground beef). Throughout the week choice cuts averaged $297.91 (up $9.45 from a week ago) and select cuts averaged $281.90 (up $5.36 from a week ago) and the week's total movement of cuts, grinds and trim totaled 439 loads.
MONDAY'S CATTLE CALL: Steady to $5.00 higher. Ahead of knowing how many cattle were bought with time, it's hard to know what next week's cash cattle market will do. But given the fact that some packers were needing cattle that were bought this week delivered as early as next week continues to emphasize the fact that showlists are green and packers are in desperate need of more cattle.
FEEDER CATTLE:
It was a challenging day for the feeder cattle complex as trades wanted to trade the market's strong fundamentals, but they were also taxed with watching the corn market's rally and gauging how much pressure that would inflict upon feeders. With the nearby corn contracts rounding out the day anywhere from $0.06 to $0.14 stronger, most of the feeder cattle contracts closed lower, but the spot April and May contract were able to close slightly higher. With the CME Feeder Cattle Index now above $200.00 per cwt, traders elected to look past the corn market's modest gain as demand continues to be relentless for feeder cattle in sales throughout the countryside. April feeders closed $0.73 higher at $203.4, May feeders closed $0.10 higher at $207.9 and August feeders closed $1.03 lower at $223.95. The Oklahoma Weekly Cattle Auction Summary shared that, throughout the entire state and when compared to last week, feeder steers traded $4.00 to $8.00 higher, and feeder heifers traded $4.00 to $10.00 higher. Steers calves sold steady to $2.00 higher and heifer calves traded $5.00 to $10.00 stronger. Feeder cattle supply over 600 pounds was 62%. The CME Feeder Cattle Index for April 12: up $1.54, $201.31.
LEAN HOGS:
Even though corn prices closed higher, the lean hog complex was able to round out the week on a stronger note as traders found technical support after Thursday's substantially lower close. Early next week, the market will be challenged to either provide some fundamental backing in order to keep above that support plane, or prices could again fall lower. Yes, pork cutout values closed slightly higher, but before traders are willing to advance the contracts higher on improved demand, they'll need to see more consistently from end consumers. June lean hogs closed $1.22 higher at $86.87, July lean hogs closed $1.12 higher at $89.65 and August lean hogs closed $0.77 higher at $90.52. Pork Cutouts totaled 258.75 loads with 226.49 loads of pork cuts and 32.26 loads of trim. Pork cutout values are up $0.69 at $78.25. Friday's slaughter is estimated at 475,000 head, 39,000 head less than a week and year ago. Saturday's slaughter is projected to be around 173,000 head. The CME Lean Hog Index for April 12: up $0.70, $71.95.
MONDAY'S HOG CALL: Lower. With pork demand not seeing enough interest to lure packers into supporting the cash market more so, prices will likely continue to chop sideways to somewhat lower for the near future.
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