Monday Midday Livestock Market Summary - Trading Fully Higher

General Comments

Livestock contracts continue to trend upward with the lean hog sector taking the day's light and rallying upwards of $3.00. Substantial support seems to be building throughout the entire livestock complex as all contracts have traded with little to no pressure and head into the afternoon confidently. July corn is down 8 3/4 cents per bushel and July soybean meal is up $0.60. The Dow Jones Industrial Average is up 275.97 points and NASDAQ is up 98.86 points.

LIVE CATTLE

Live cattle contracts have been able to tap into the support and optimism circulating throughout the complex and head steadily higher at midday. June live cattle are up $0.82. at $83.45, August live cattle are up $1.07 at $89.97 and October live cattle are up $1.07 at $95.55. Showlists continue to grow as the volume of cattle traded each week is extremely thin. Asking prices have yet to surface as the industry looks to see what the week will bring and what's all available. The biggest help of all would be if packing plants came back on board and ran two shifts per day, for six days a week. Working through the built-up supply developing in the industry is going to be a major hurdle.

Boxed beef prices are higher: choice up $14.38 ($307.75) and select up $15.23 ($294.25) with a movement of 51 loads (29.22 loads of choice, 6.52 loads of select, 8.32 loads of trim and 6.89 loads of ground beef). The rally that boxed beef prices have had through the turmoil of COVID-19 is truly unbelievable. Just last week alone both choice and select cuts individually jumped over $50.

FEEDER CATTLE

Feeder cattle prices head into the noon hour fully higher. For cattlemen that are looking to market calves this late spring/early summer a higher futures market would help encourage buyers to stay aggressive in their buying as buyers are needing cattle for grass but have been anxious as the market is chaotic. May feeders are up $1.22 at $118.67, August feeders are up $1.30 at $127.70 and September feeders are up $1.07 at $128.87.

LEAN HOGS

It's been a phenomenal day for the lean hog complex as the board continues to push most of the contracts higher and the cash market even traded higher -- wahoo! June lean hogs are up $3.75 at $55.27, July lean hogs are up $3.75 at $58.42 and August lean hogs are up $3.25 at $61.57. The key question: as always, is will this rally continue into the week or will it regress as the week progress. Given the current depressed nature of the marketplace, one would hope prices are making a turn for higher ground.

The projected lean hog index for 4/23/2020 is up $1.44 at $47.72, and the actual index for 4/22/2020 is up $0.92 at $46.28. Hog prices are higher on the National Direct Morning Hog Report, up $0.33 with a weighted average of $34.45, ranging from $31.00 to $36.00 on 4,779 head sold and a five-day rolling average of $33.46. Pork cutouts total 154.08 loads with 138.02 loads of pork cuts and 16.06 loads of trim. Pork cutouts values: up $3.75, $81.23.

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Monday Morning Livestock Market Summary - Hope Developing That Bullish Cattle on Feed Report Sparks Buying

GENERAL COMMENTS:

Generally light overall cash cattle trade developed last week with prices covering a generally wide range. The full range in Southern live trade was $148 to $160 per cwt, generally $5 per cwt lower than the previous week. Northern dressed trade was from $93 to $100 per cwt, lower than the previous week by $5 per cwt and more. Limited interest is expected this week even though there has been light buying in the last several weeks. The lighter production levels at plants have left packers with little incentive to purchase additional cattle. The continued uncertainty of plant operations of outbreaks in each plant is a day-to-day issue that will continue to be closely monitored on all levels. This will continue to create significant concern in all areas of the industry, but will likely leave cattle feeders with few options on where to send market-ready cattle. Friday's Cattle on Feed report posted supportive news as placements and total on-feed levels fell significantly from year-ago levels. Reductions were expected, but given the uncertainty in the market and variability of pre-report estimates, traders went into the report not having confidence in what overall direction would be. With feedlot cattle at 95% year-ago levels, and placements in March 77%, the focus on tighter long-term supplies is expected to help stimulate buying through the end of 2020 and early 2021. Futures are expected mixed in limited trade, as potential support from Friday's Cattle on Feed report is likely to spark deferred buying, which may quickly trickle through the rest of the complex. Monday slaughter is expected at 88,000 head.

Light end of the week buyer support in lean hog futures may spark renewed, technically-driven support early Monday morning. Given the shift higher in the last couple of trading sessions, technical long-term lows may have been set. Even though there is growing uncertainty about overall processing plants reopening in the near future, the concern seems to be fading of further widespread pressure. Strong retail demand continues with supermarket buying still active and pork supplies moving out of storage to meet the demand. An increased boost in food service demand is expected in the upcoming weeks with plans to gradually reopen the economy in several states. If some of these businesses do reopen, it is going to take a few days of lead time in order to build working stocks after being shuttered for a few weeks. Cash hog values are expected $1 lower to $1 higher cwt lower with most bids expected steady to 50 cents lower. Slaughter Thursday is expected at 322,000 head. Saturday runs are expected at 141,000 head.

	BULL SIDE		BEAR SIDE
1)	Strong reductions in cattle placement levels during March is not a huge surprise given the market conditions, but the focus on long-term market support as these cattle work through the system through the end of the year is helping to put a better long-term outlook on the currently dismal cattle market.	1)	Surging wholesale beef values continues to widen the gap between cattle prices and wholesale price levels. This continues to create a significant disconnect through the industry with uncertainty of how this disparity will be resolved without significant repercussions over the coming days and weeks.
2)	Strong meat demand at retail locations is expected to continue as the concern of tight supplies due to lighter packing plant operations will continue to be the focus in the meat industry over the near future.	2)	Limited processing in the industry will continue to create challenges to move market-ready cattle through the system, and keeping the system current. This will create a backlog of larger animals needing to move through supply chain through the month of May.
3)	Underlying support in pork cutout values is helping to spark market stability through the complex as traders look for increased long-term support through the entire market based on the dispersal of previous pork stocks.	3)	Continued concerns of sluggish food service demand and how the plan to reopen businesses will develop on local and regional levels may create further concern for significantly regaining pork demand over the near future.
4)	Firm gains in lean hog futures is helping to rekindle technical buyer support. With all contracts back above $50 per cwt through the end of last week, the potential that long-term lows have been set may be able to actively attract outside buyer interest given the weakness in most other commodity markets.	4)	Continued reductions in pork processing will continue to limit the availability to market hogs. At this point, price levels are not the main concern as it is reported that packers are not in the market even for already committed hogs due to lower plant throughputs. This will continue to back up the production system for weeksContinued reductions in pork processing will continue to limit the availability to market hogs. At this point, price levels are not the main concern as it is reported that packers are not in the market even for already committed hogs due to lower plant throughputs. This will continue to back up the production system for weeks.

#completecalfcare

Friday Closing Livestock Market Summary - Like Walking Through Landmines

GENERAL COMMENTS:

Being involved in agriculture through the COVID-19 pandemic seems a lot like walking through a field of landmines. Some of the mines are false alarms and some of them are lively and explosive. The constant panic and fear that producers and traders are enduring is both exhausting and an extremely heavy burden to carry. Being a rancher in the 21st century isn't a simple job, but add the unexpected turn of events that COVID-19 brings to the table and it's a whole new ball game.

Hog prices close lower on the National Direct Afternoon Hog Report, down $0.53 with a weighted average of $34.20, ranging from $31.00 to $38.00 on 6,476 head sold. July corn is down 3 cents per bushel and July soybean meal is down $0.50. The Dow Jones Industrial Average is up 260.01 points and NASDAQ is up 139.77 points.

From Friday to Friday, livestock futures scored the following changes: April live cattle down $9.68, June live cattle down $3.68; April feeder cattle up $0.27, May feeder cattle down $1.83; June lean hogs up $7.80, July lean hogs up $2.75.

LIVE CATTLE:

Live cattle contracts swung hard at Friday and fought hard to trade higher into closing. June live cattle closed $0.30 lower at $82.62, August live cattle closed $0.45 higher at $88.90 and October live cattle closed $0.92 higher at $94.47. Friday's cash cattle trade was mostly steady with the earlier part of the week's trade, except for the cattle, which sold in the South around $5.00 weaker. Heading into the weekend, all eyes and ears remain on the packing plant situation as it continues to cripple the industry.

Friday's slaughter is estimated at 83,000 head, 4,000 head less than a week ago and 31,000 head less than a year ago. Saturday's slaughter is estimated to be around 47,000 head, 7,000 head more than the previous week. It's helpful that the plant in Greely, Colorado, is now back up and running; though not at full production, every little bit helps.

Friday's Cattle on Feed Report shared that cattle and calves on feed were down 5%, placements were down 23% (the lowest that placements have ever been since the series began in 1996, at 1.56 million head), and marketings up 13%.

Boxed beef prices close higher: choice up $9.08 ($293.37) and select up $6.13 ($279.02) with a movement of 70 loads (37.83 loads of choice, 6.73 loads of select, 13.67 loads of trim and 11.57 loads of ground beef).

MONDAY'S CASH CATTLE CALL: Steady. It's going to be ugly for a while. The fact we are going on week three of reduced kills has backed the industry up enough to the point where if all plants came back on next week -- at fully capacity -- it would still take a couple of weeks to work through the built-up supply.

FEEDER CATTLE:

Feeder cattle contracts closed Friday fully higher, pushing contracts $0.02 to $0.85 higher for the day's close. May feeders closed $0.17 higher at $117.45, August feeders closed $0.02 higher at $126.40 and September feeders closed $0.30 higher at $127.80. All in all, the week traded largely sideways without gaining or losing too much ground, which makes sense as traders are leery of the livestock marketplace.

On Thursday, at Mitchell Livestock Auction in Mitchell, South Dakot,a compared to last week, a lower under tone was noted on a light test of steers up to 700 pounds. Steers 700 pounds and up were steady to $3.00 higher, except 750 to 800 pound steers, which were $10.00 lower. Heifers up to 650 pounds sold unevenly steady. Heifers 650 to 750 pounds sold $6.00 to $9.00 higher, while heifers over 750 pounds sold $1.00 to $4.00 lower. The CME feeder cattle index 4/23/2020: down $0.93, $119.48.

LEAN HOGS:

Despite the pressure felt industry wide from packing plant closures, the hog market successfully close higher and traded higher most of the week. June lean hogs closed $0.10 lower at $51.52, July lean hogs closed $0.30 higher at $54.67 and August lean hogs closed $0.45 higher at $58.32. Pork cutouts total 325.37 loads with 277.16 loads of pork cuts and 48.21 loads of trim. Pork cutout values: up $1.11, $77.48. Friday's slaughter is estimated at 361,000 head, 40,000 head less than a week ago and 88,000 head less than a year ago. Saturday's production is estimated at 191,000 head. The CME lean hog index 4/22/2020: up $0.92, $46.28.

MONDAY'S CASH HOG CALL: Lower. Given the complexity and uncertainty of the marketplace, a lot can happen over the weekend. But regardless of what happens, there's a surplus of hogs built up that's pressuring the market.

#completeherdhealth

   

Friday Midday Livestock Market Summary - Feeling Optimistic

General Comments

Heading into the noon hour cattle contracts are trying to develop some support and look to catch up with the lean hog contracts progression but have encountered some mild resistance along the way. July corn is down 4 1/2 cents per bushel and July soybean meal is down $0.20. The Dow Jones Industrial Average is down 20.84 points and NASDAQ is up 27.19 points.

LIVE CATTLE

Live cattle contracts have traded on both sides of steady Friday morning but eager to close the week out higher, nonetheless. June live cattle are down $0.12 at $82.80, August live cattle are up $0.60 at $89.05 and October live cattle are up $0.92 at $94.47. As far as cash cattle trade goes, it looks as if the heart of this week's trade could be essentially done except for a little bit of clean up here and there. There has been some light trade in Texas for $95, $10 lower than last week's weighted average. On Thursday Northern cattle sold for $148 to $160 and live for $95 to $100. There was also some light trade reported in the South for $100.

Friday afternoon's release of the Cattle on Feed Report is drawing a lot of attention as the placement figure is estimated around 80.7%, ranging a vast 54.6% to 86.1%. The report is released at 2:00pm (CST).

Boxed beef prices are higher: choice up $5.32 ($289.61) and select up $4.29 ($277.18) with a movement of 35 loads (14.29 loads of choice, 3.56 loads of select, 7.65 loads of trim and 9.31 loads of ground beef).

FEEDER CATTLE

The bulk of feeder cattle contracts are trying to trade higher and thus far have managed to rally $0.05 to $0.50. The morning has pressured the complex's vigor as contract have been pushed lower a couple of times. May feeders are up $0.12 at $117.40, August feeders are up $0.22 at $126.60 and September feeders are up $0.47 at $127.97.

LEAN HOGS

July and July lean hog contracts may be scaling slightly lower but for the most part the lean hog complex is carrying on, trading modestly higher. June lean hogs are down $0.12 at $51.55, July lean hogs are down $0.10 at $54.27 and August lean hogs are up $0.65 at $58.52. The cash market wasn't able to rally Friday morning but given the current packing plant situation, that's to be expected.

The projected lean hog index for 4/22/2020 is up $0.92 at $46.28, and the actual index for 4/21/2020 is up $0.59 at $45.36. Hog prices are lower on the National Direct Afternoon Hog Report, down $1.00 with a weighted average of $33.73, ranging from $31.00 to $35.00 on 4,416 head sold and five-day rolling average of $32.76. Pork cutouts total 200.90 loads with 175.42 loads of pork cuts and 25.47 loads of trim. Pork cutouts values: down $3.81, $72.56.

#completecalfcare