GENERAL COMMENTS:
Livestock futures markets are seeing a second consecutive day of sharp losses in cattle contracts with traders focusing on the uncertainty surrounding how tariff levels and corresponding reactions from China will impact overall demand and price levels in the near and distant future. At this point, there is very little firm information about how long current market impacts will be seen, especially in livestock and meat markets. But traders are taking precautions and sharply lower prices reflect this market uncertainty. May corn is up 1 3/4 at $4.593 and May soybean meal is down $3.30 at $284.7. The Dow Jones Industrial Average is down 1,430.22 at 39,115.71.
LIVE CATTLE:
Live cattle futures are trading sharply lower Friday morning in reaction to additional tariff concerns and announcements that China is implementing corresponding tariffs starting next week. The overall lack of support in all livestock markets is following the pattern of sharp losses in the stock market and financial trade. Current losses of $4 to $5.50 per cwt seen in nearby contracts are still below daily trade limit levels of $6.50 per cwt. But daily limit moves are not out of the question through the end of the session. Cash cattle markets remain moderately active through the morning Friday with light trade reported in parts of the South at $208, $1 to $2 lower than last week's weighted averages, but generally steady with Thursday's very light scattered transactions. Northern business Thursday had dressed deals marked at mostly $335, with a regional packer paying as much as $345, generally steady with last week's wide range. It is expected that additional activity will develop through the afternoon Friday, although given the pressure in futures trade and outside markets, it is uncertain if packers will become more aggressive at this point. April live cattle are $3.73 lower at $204.325, June live cattle are $5.15 lower at $199.55, August live cattle are $5.13 lower at $196.05.
Boxed beef prices are Higher: choice up $1.04 ($339.41) and select up $0.51 ($318.35) with a movement of 47.58 loads (36.33 loads of choice, 6.59 loads of select, zero loads of trim and 4.66 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures are sharply lower Friday morning with traders continuing to focus on the potential that this week's round of tariffs will have prolonged reactions. The announcement that China is implementing offsetting tariff actions starting next week is another indication of market problems. April contracts are showing the least pressure at this point, although losses nearing $6 per cwt are usually seen as disastrous for the market. But May and August futures are trading near $8 per cwt lower at midday, which is dangerously close to the $8.25 per cwt daily trading limit. A close at this limit would indicate expanded limits Monday. And if the continued bearishness holds over the weekend, this could continue to wipe out all of the gains seen this year. April feeders are $5.48 lower at $279.925, May feeders are $7.28 lower at $275.85 and August feeders are $7.15 lower at $282.15.
LEAN HOGS:
Lean hog futures have moved sharply lower, also focused on tariff levels and the announcement that China will impose tariffs starting next week. This has moved June futures to the $4 per cwt daily trading limit with most other nearby contracts near that level at midday. A close at these levels would indicate expanded trading limits Monday, creating potential additional pressure early next week. April lean hogs are $0.18 higher at $87.55, May lean hogs are $3.33 lower at $85.25 and June lean hogs are $3.95 lower at $91.60. Hog prices are higher on the Daily Direct Morning Hog report, up $0.04 with a weighted average of $87.38, ranging from $84.00 to $88.00 on 3,811 head with a five-day rolling average of $88.17. Pork cutouts totaled 181.39 loads with 162.71 loads of pork cuts and 18.68 loads of trim. Pork cutout values are up $5.12 at $97.08.
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