Closing Comments
For the most part, cash cattle trade remains poorly defined Wednesday afternoon. Reports of one regional buyer in Nebraska paying $200 per cwt for several pens of cattle have surfaced. But other than that, cattle sales have been undeveloped. Cattle sales on the Fed Cattle Exchange were undeveloped with no sales taking place on all 3,529 head offered on the exchange during the morning. Bids in feedlot country are seen at $122 live. Asking prices are at $130 in the South and $205 in the North. It is likely that active trade will be seen Thursday or Friday, but at this point, it is uncertain just how many cattle will need to be sold through the week. According to the closing report, the national hog base is $0.14 lower compared with the prior day settlement ($55.00-$61.00, weighted average $59.85). The corn trade bounced higher in light activity. May futures posted a 1 cent gain Tuesday. The Dow Jones Index is 70 points higher with the Nasdaq up 5 points.
LIVE CATTLE
Live cattle futures quickly moved to nearly stable market moves ($0.07 lower to $0.12 higher) following what started out to be a volatile and aggressive turn lower Wednesday morning. The early pressure quickly focused on the early week pressure in the cattle complex, which is accounting for expected cash cattle trade and recent weakness in the futures markets. There is likely to be some additional selling pressure developing across the complex, but the entire market stabilized in the last hour of trade and moved to single-digit market moves in all but one contract month. It is unlikely that any additional market strength will develop in the near future, but traders seem to have temporarily found a sense of stability near $118 per cwt and are willing to take a breath. Beef cut-outs: mixed, $0.12 higher (select, $200.51) to down 1.98 (choice, $209.71) with light demand and moderate offerings (100 loads of choice cuts, 24 loads of select cuts, 13 loads of trimmings, 34 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL:
Steady to $2 lower. The lack of internet sales on the Fed Cattle exchange while over 3,500 head were offered indicated the standoff between buyers and sellers this week. Cash markets remain extremely slow with a wide gap between asking prices and bids that are extremely slow to develop midweek. This could allow for trade to develop late in the week. On the other hand, only limited trade may be seen through the week given the early activity of market participants and how strongly they feel about market moves.
FEEDER CATTLE
Despite spending most of the trading session firmly lower, feeder cattle closed mixed in a narrow range ($0.50 lower to $0.12 higher). Traders early in the session continued to back away from previous market prices with front-month April contracts testing prices near $129.50 per cwt. This softness was limited by lack of follow-through seller activity at the end of the trading session as overall volume quickly evaporated through the last hour of trade. This was seen through the entire livestock market. CME cash feeder index: 4/4: $133.13, down $0.17.
LEAN HOGS
Stability developed in lean hog futures Wednesday ($0.47 lower to $0.17 higher) as traders moved away from strong recent market losses, in an attempt to bring buyers back into the market. April futures closed 5 cents lower at $63.62 per cwt, while May and June futures posted 17- and 5-cent-per-cwt gains respectively in an attempt to spark narrow commercial buyer support midweek. At this point, it is premature to draw underlying support from cash market activity, but even light underlying gains in pork values may help to rekindle buying activity in what is likely to have been an oversold lean hog complex over the last three weeks. Potential buyer support may continue to develop over the near futures, moving into both nearby and deferred contracts. Carcass values are lower. Sharp losses in most primals were offset with Bellies being the only market posting a gain Wednesday. Pork cut-out: $74.87 down $0.63. CME cash lean index for 4/3: $67.07, down $0.52. DTN Projected lean index for 4/4: $66.60, down $0.47.
THURSDAY'S CASH HOG CALL
Steady to $1 lower. Packers continue to return each morning with the same mantra, and this continues to get business done day after day. Bids of steady to $1 lower are expected to be the general range once again, though most prices are likely to be seen steady to weak by the time the morning is over Thursday. The overall light expectation of trade Saturday has more to do with packers' ability to keep their hand on the throttle than anything else throughout the industry at this point. Packer runs Thursday are pegged at 441,000 head, with 83,000 scheduled on Saturday.
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