GENERAL COMMENTS:
The 3.5% jump in March's Consumer Price Index (CPI) sent the livestock complex trading lower and was ultimately the demise of the market through Wednesday's trade. The cash cattle complex didn't see any trade develop but asking prices have been noted in the South at $186. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $3.14 with a weighted average price of $90.63 on 5,283 head. May corn is up 3 cents per bushel and May soybean meal is down $4.70. The Dow Jones Industrial Average is down 421.95 points.
LIVE CATTLE:
Wednesday's market stood little chance of trading higher as the 3.5% spike in the CPI took out what little steam the live cattle market had this week. Not to mention, as traders and cattlemen noted the inflation increase, they also were blue as they watched boxed beef prices round out the day lower, too. The only bit of good news that came from today's trade was that even with the day's lower note, the market didn't take out last Friday's low, an important price point to monitor moving forward. If bearish pressure continues and traders do take out that support plane, the market could be in for a wild ride as the next major support plane is around $164.
No cash cattle trade developed throughout the day, but packers did offer up some late afternoon bids in the South at $184 to $185. Asking prices in the South remain firm at $186 and have not yet been established in the North. Trade will likely be delayed until sometime late Thursday or even Friday.
Wednesday's slaughter is estimated at 112,000 head -- 11,000 head less than a week ago and 12,000 head less than a year ago.
Boxed beef prices closed lower: choice down $3.86 ($298.23) and select down $3.88 ($296.02) with a movement of 129 loads (85.83 loads of choice, 18.87 loads of select, 4.99 loads of trim and 19.05 loads of ground beef).
THURSDAY'S CATTLE CALL: Lower. Likely, this week's market will again trade $1 to $3 lower as packers have pulled the reins back on throughput even more.
FEEDER CATTLE:
Between the pressure that swelled above the market, thanks to the CPI announcement, the feeder cattle contracts stood little to no chance of trading higher throughout Wednesday's trade with the lower trend in live cattle prices and corn prices trading slightly higher. Unfortunately, the market's fundamentals didn't weigh in the market's favor either as traders looked to only one thing only -- inflation -- throughout the day's trade.
April feeders closed $2.42 lower at $238.27, May feeders closed $2.92 lower at $236.52 and August feeders closed $2.50 lower at $247.60. At Winter Livestock Auction in La Junta, Colorado, compared to last week, feeder steers weighing under 500 pounds sold $3 to $16 higher. Feeder steers over 550 pounds sold $1 to $3 lower and feeder heifers sold $4 to $10 higher across all weight classes. Slaughter cows traded steady but slaughter bulls sold $3 higher. Feeder cattle supply over 600 pounds was 45%. The CME feeder cattle index April 10: down $0.34, $245.49.
LEAN HOGS:
The lean hog complex reacted the poorest of all the livestock contracts to today's CPI note. Both trades and hog producers are worried that if consumers become too financially taxed, pork demand could see a decline, especially as the market is banking on good summer demand. June lean hogs closed $3.02 lower at $105.55, July lean hogs closed $2.87 lower at $107.50 and August lean hogs closed $2.50 lower at $105.27.
Even though cash hog prices were lower, it was impressive to see another 5,000 head traded in the cash market following the 7,000 head traded on Tuesday. Pork cutouts totaled 253.23 loads with 230.82 loads of pork cuts and 22.41 loads of trim. Pork cutout values: down $0.46, $100.25. Wednesday's slaughter is estimated at 489,000 head -- 2,000 head less than a week ago and 12,000 head more than a year ago. The CME lean hog index 4/8/2024: up $0.83, $87.88.
THURDSAY'S HOG CALL: Lower. Given that packers have been aggressive in the cash market for two days in a row now, it's likely they show less interest in regards to price and volume needed on Thursday.
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