GENERAL COMMENTS:
It was a mentally exhausting day watching the livestock complex trade as the cattle complex ran sharply lower as concerns, fear and nervousness set into traders' minds with HPAI currently affecting some dairy cows in the Southern Plains. The hog complex was able to maintain most of its position and continues to look forward to Thursday's Quarterly Hogs and Pigs report. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.54 with a weighted average price of $80.63 on 5,309 head. May corn is down 5 1/4 cents per bushel and May soybean meal is down $1.90. The Dow Jones Industrial Average is down 31.31 points.
LIVE CATTLE:
Today was a perfect example of how the market can quickly fall into the Chicken Little trap of "the sky is falling" mentality. The live cattle complex didn't suffer as gravely as the feeder cattle contracts did, but still, the live cattle market closed mostly $3.00 lower. April live cattle closed $3.10 lower at $183.10, June live cattle closed $3.22 lower at $178.37 and August live cattle closed $3.55 lower at $176.42. The cash cattle market could be a supportive factor that the futures complex desperately needs if it's able to trade higher again this week. Time will tell, but as of this point, no sizeable volume of cattle has traded.
Tuesday's slaughter is estimated at 125,000 head -- 3,000 head more than a week ago but steady with a year ago.
Boxed beef prices closed mixed: choice up $0.20 ($311.09) and select down $1.70 ($300.26) with a movement of 122 loads (62.29 loads of choice, 24.62 loads of select, 12.72 loads of trim and 22.56 loads of ground beef).
WEDNESDAY'S CATTLE CALL: Steady to $1.00 higher. Packers may be building up supply, but the fact remains that showlists are still current and that with consumer demand as strong as it is -- they're going to keep procuring cattle.
FEEDER CATTLE:
If we want to look at today's market through a "glass half full" perspective, at least the feeder cattle contracts didn't close limit lower. But besides that fact, the market wasn't able to accomplish much else good throughout Tuesday's trade. I personally struggle with days like today because it seems like more and more often, the market and the traders and participants within the market like to react first and drive prices lower, and then think and ask questions. I understand that the HPAI flu that's affecting some dairy cattle is somewhat alarming. But isn't it overdone to push the market $4.00 to $5.00 lower when the USDA shared that consumers aren't at risk and the cattle affected are showing relatively minor side effects (a decrease in appetite and milk production decreased by 10-20%) and fully recover within seven to ten days? Whether it is or isn't overdone, the market traded lower throughout the day as fear and nervousness took hold of trader's interest like a thief in the night.
April feeders closed $5.00 lower at $245.45, May feeders closed $5.37 lower at $247.25 and August feeders closed $5.07 lower at $257.10. At Oklahoma National Stockyards in Oklahoma City, Oklahoma compared to last week feeder steers traded $3.00 to $6.00 lower and feeder heifers traded $4.00 to $8.00 lower. Steer calves sold steady to $5.00 lower while heifer calves traded steady to $2.00 lower. The sale report did note that it appeared as though grass buyers had pulled out of the market as seven weight steers and six weight heifers that would normally go to grass traded sharply lower. The CME feeder cattle index 3/25/2024: down $0.07, $251.63.
LEAN HOGS:
The lean hog complex may have faced a little bit of pushback in some of the market's nearby contracts, but all in all the market was able to close mostly higher as the market's deferred contracts didn't bat an eye at the market's turmoil. April lean hogs closed $0.42 higher at $85.57, June lean hogs closed $0.32 lower at $101.35 and July lean hogs closed $0.07 lower at $103.85. It's disappointing that pork cutout values closed lower as traders need continuous fundamental support if they're going to continue to advance the market and potentially take on the current resistance threshold at $103 in the June contract. The belly was the biggest reason why pork cutout values closed lower this afternoon as prices fell $10.36 lower there. Pork cutouts totaled 267.81 loads with 229.04 loads of pork cuts and 38.77 loads of trim. Pork cutout values: down $0.41, $95.33. Tuesday's slaughter is estimated at 490,000 head – 1,000 head less than a week ago and 9,000 head more than a year ago. The CME lean hog index 3/22/2024: down $0.09, $83.48.
WEDNESDAY'S HOG CALL: Steady to somewhat lower. Packers did buy slightly more hogs in today's cash market which could indicate that they need more supply, but with pork cutout values closing lower, I doubt that they'll be too aggressive in advancing the cash market.
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