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Wednesday, February 28, 2018

Wednesday Closing Livestock Market Summary - Livestock Futures Hit Wall at Midweek

GENERAL COMMENTS
Initially spooked by lower-trending live futures, feedlot managers quickly moved to accept lower bids and capture attractive basis opportunities. Most live sales were marked at $126, $2 lower than last week. Some business was reported in Colorado and western Nebraska at $127, roughly $1 lower than last week. Dressed trade in the North was primarily marked at $204, some lower from last week's weighted average basis Nebraska (i.e., $204.44). Generally speaking, volume totals seemed moderate, though parts of the South could be done for the week. According to the closing report, the national hog base is $0.07 lower ($56.00-$63.50, weighted average $62.38). The corn market closed 2-4 cents higher, supported by dry conditions in U.S. wheat country and Argentina. Stocks closed lower with the Dow off 381 points and the Nasdaq down by 57.
LIVE CATTLE
While live contracts seemed to fly all over the place through the volatile session, prices settled mostly 32 to 97 cents lower when all the shouting stopped. Spot February expired Wednesday at $127.50, off 52 cents. New spot April will take the point Thursday approximately $3 below the cash feedlot trade. Furthermore, April slipped below both the 40-day and 100-day moving averages on the close. Beef cut-outs: moderately higher, up $0.31 (select: $215.10) to $0.51 (choice: $221.03) with moderate demand and light offerings (59 loads of choice cuts, 21 loads of select cuts, 15 loads of trimmings, 15 loads of ground beef).
THURSDAY'S CASH CATTLE CALL:
Steady with Wednesday's decline. Late-week business will hinge on actual trade volume totals established on Wednesday. Mandatory totals in the morning will be important to check out.
FEEDER CATTLE:
Price swings were aggressive here as well with most contracts defining ranges as large as 200-300 points. At the close, prices settled off 65 to 220 points. Spot March closed at $144.75, its poorest finish since Jan. 25. CME cash feeder index: 02/27: $147.94, up $0.18.
LEAN HOGS:
Spring and summer lean hog futures broke hard Wednesday, off 102 to 272 on the close. Far deferreds also finished in the red, but on a more moderate basis. Spot April gapped lower on the opening and closed at its lowest point since Sept. 1. June and July settled well under 100-day moving averages. The carcass value crashed big time Wednesday, hammered by sharply lower belly sales (i.e., off $8.84). Softer demand for loins and hams was also a bearish factor. Pork cut-out: $79.53, off $0.74. CME cash lean index for 02/26: $68.83, off $0.49 (DTN Projected lean index for 02/27: $68.57, off $0.26).
THURSDAY'S CASH HOG CALL:
Steady to $1 lower. Expect hog buyers to open with defensive bids in the morning as they stew over dissipating carcass value.

Wednesday Midday Livestock Market Summary - Moderate Losses Develop Wednesday Morning

GENERAL COMMENTS: 
Light to moderate pressure is seen through the entire livestock complex. This is adding additional shifts to the complex through the day, and bringing a sense of market weakness to the table. Corn prices are higher in light trade. March corn futures are 4 cents higher Wednesday. Stock markets are higher in light trade. The Dow Jones is 29 points higher while Nasdaq is up 37 points.
LIVE CATTLE:
Mixed trade is seen in live cattle trade Wednesday morning following wild market shifts and continued underlying pressure developing in the complex. Any aggressive price support seen in February futures early in the session has quickly eroded with traders concerned about additional pressure developing in most contracts. Narrow gains are seen in deferred futures, although the tone of the market remains unsettled to weak through the last trading day of February. Cash cattle markets dispelled the expectation that activity would be delayed until late in the week once again with light to moderate trade developing in most areas. Prices are generally $2 per cwt lower than last week. Live basis price levels are seen at $126 to $127 per cwt with most sales at $126 per cwt. Dressed sales have yet to be reported, but bids are at $202 to $203 per cwt. The tone of the market is likely set given the bearish shift in futures trade through the morning. The Fed Cattle Exchange Auction today listed a total of 365 head, with 80 actually sold, 285 head listed as unsold, and 0 head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 162 total head, with 80 head sold at $126.00, 82 head unsold, 0 head listed as PO; NE -- no cattle reported; TX -- no cattle reported; CO -- no cattle reported; IA -- no cattle reported; other states (Oklahoma) 203 total head, with 0 head sold, 203 head unsold, and 0 head listed as PO. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 365 head total, 80 head sold, with a weighted average price of $126.00; 1-17 day delivery -- no cattle reported; 10-17 day delivery -- no cattle reported; 17-30 day delivery -- no cattle reported. Boxed Beef cut-outs at midday are mixed, $0.01 lower (select) and up $0.43 per cwt (choice) with light movement of 65 total loads reported (35 loads of choice cuts, 10 loads of select cuts, 7 loads of trimmings, 12 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures have posted light to moderate pressure across the complex during morning trade. Combined pressure in the entire cattle market and end-of-month position squaring is the main focus on morning losses. This could add even more wide spread pressure through the rest of the complex with traders looking for increased direction seen in cash cattle trade through the day. Futures trade has pulled back from early session lows, but is still holding prices 30 to 90 cents lower at midday.
LEAN HOGS:
Strong triple-digit pressure is seen in lean hog futures trade through the morning, which is creating end-of-month weakness through the entire complex. There is growing concern that additional market pressure will quickly develop in all nearby contracts as futures have broken through support levels. This has totally erased the market rally seen over the last couple of weeks, and may bring added softness to the entire market. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.06 at $62.51 per cwt with the range from $56.00 to $63.36 on 4,340 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is lower $0.35 at $61.59 per cwt with the range from $58.00 to $62.50 on 1,925 head reported sold. The National Pork Plant Report posted 245 loads selling with carcass values falling $1.50 per cwt. Lean hog index for 2/26 is at $68.83, down 0.49 with a projected two-day index of $68.57, down 0.26.

Wednesday Morning Livestock Market Update - Meat Futures Staged for Mixed Opening at Midweek

GENERAL COMMENTS:
The midweek cash cattle trade is expected to remain a slow affair. We could see a few more bids tossed on the table, as well as more preliminary asking prices. Significant trade volume will probably be delayed until Thursday or Friday. Of course, it's possible that the changing of the guard in live futures (i.e., February's expiration and April's new spot position) could impact the timing of cash market development. If April begins to rally toward cash, feedlot managers may feel more comfortable in waiting for better packer bids. On the other hand, if April stalls and/or deepens its discount, negative psychology could prompt feedlot managers to throw in the towel relatively early. Live and feeder futures should open on a mixed basis thanks to a slow combination of residual buying and long liquidation.
Hog buyers should resume work Wednesday with bids steady to $1 lower. Thanks to decent profit margins, packers clearly like their work. On the other hand, the country offering of market hogs is generous enough that buyers don't have to push very hard to enjoy the party. This week's slaughter is expected to be right at 2.4 million head, approximately 3% greater than last year. Harvest levels are expected to stay near current levels for the next month or so. Lean futures should also open with uneven price action with deferreds probably gaining more ground on nearbys.
BULL SIDEBEAR SIDE
1)
The ongoing signs of early-year beef demand remain impressive. Last week's boxed beef summary indicated advanced sales (i.e., with delivery of 22 days or more) totaling as much as 1,249 loads.
1)When February live cattle expires Wednesday at noon, the substantial discount of new spot April could encourage both hedgers (i.e., responding to basis strength) and cash marketers to sell ready cattle sooner rather than later.
2)Though recent on feed data confirmed aggressive placement activity through January, feedlot in-movement is expected to slow soon. Why? Because cattle grazing on wheat as of Jan. 1 (typically a large pool of replacement feeders for feedlots to pull on in the late first quarter and early second) numbered no more than 1.5 million head, 17% below 2017.2)While cattle futures managed to recover somewhat from Monday's sell-off, many contracts settled 100 points or more below session highs. The stiff and stubborn resistance suggested by spring summer live charts continues to reflect the trade's nervousness about building total meat supplies over the next six months.
3)Although China's decision to drop anti-dumping and anti-subsidy duties as of Tuesday on U.S. broilers may not have a direct market impact because the China market remains closed to U.S. poultry and egg exports due to an ongoing avian influenza ban imposed in 2015, it seems like a big step in the right direction, potentially tightening per capita meat supplies in the U.S.3)The pork carcass value slipped lower again on Tuesday, especially pressured by a $7.72 drop in the belly primal.
4)The pork cutout holds nearly an $11 premium over the most recent cash index calculation, suggesting excellent processing margins.4)
Despite lower bids in hog country Tuesday, packers seemed to have little trouble generating a large run (i.e., closed to 18,000 negotiated sales on a national basis). In short, the late-winter offering of ready barrows and gilts seems ample, lending hog buyers plenty of leverage.
OTHER MARKET SENSITIVE NEWS 
CATTLE:(financialexpress.com) -- With increasing health consciousness among people, the Chinese food eating habits are witnessing a paradigm shift. A recent PTI report suggests that more and more people in China are switching to vegetarian food. In China, a country which is the world's largest market for beef, pork, and poultry, eateries are going all vegan to encash this popular sentiment. The report hints that people relate non-vegetarian food with high blood pressure and obesity. This has made the vegan eateries more competitive than ever.
Han Lili, a Shanghai-based artist told PTI that the number of vegan restaurants has multiplied from 49 in 2012 to more than 100 last year in China's largest city, Shanghai. Another report by research firm Euromonitor pointed out that the demand for pork, beef, and poultry in China has seen a decline in the recent years. Another such report by Chinadialogue.net also highlights the decline in the sales of pork from 42.49 million tonnes in 2014 to 40.85 million tonnes in 2016.
Furthermore, the imports of vegetable and fruits have also registered a spike since the growing trend of vegetarianism. As per UN trade figures, imports of avocados rose alone saw a whopping 13,000-fold increase between 2010 and 2016. The report suggests that the shift is also an impact of many dietary guidelines in China advising to eat healthy, environment-friendly vegetarian food. Notably, around 150 million tonnes of carbon dioxide is released into the atmosphere every year by the Chinese meat industry.
In 2014, a Xinhua news agency report claimed that more than 50 million people shun meat in their meal in China. It is worth mentioning here that as per many world vegetarian outfits, India habitats the largest world vegan population with over 500 million vegetarian people.
HOGS: (North Platte Telegraph) -- Last month the U.S. Department of Agriculture announced that it was allowing Mexico to export pork to the United States for the first time in over a decade. That move has support from the National Pork Producers Council and from local pork producers.
According to a press release from the National Pork Producers Council, Mexico requested approval to export pork to the United States in 2007, but the request was denied over concerns about classical swine fever, a highly contagious, often fatal, viral disease of pigs. Since then, the USDA has facilitated training for Mexican officials and personnel in disease diagnosis and control, and "a subsequent review by the World Organization for Animal Health... determined that Mexico was free of CSF," according to the release.
The release quoted council President Ken Maschhoff: "The U.S. pork industry is a strong supporter of free trade and of using epidemiological science and risk analyses to determine if trade can be safely conducted between countries ... Mexico in 2017 was our No. 2 export market, so maintaining our good relationship with that country by ensuring fair and reciprocal trade is paramount for our producers."
Maschhoff, of Carlyle, Illinois, is part owner of The Maschhoffs, a pork producing corporation that includes facilities throughout the Midwest, including in Arapahoe and Wallace.
Jeff Heinrich, director of Pillen Family Farms, agreed that the decision is a good thing.
"Free trade benefits producers, consumers and the overall economy." Heinrich said. "As ag producers continue to improve, fair trade relationships will only become more critical."
He added, "Consumers benefit from free trade by having access to safe food at reasonable prices."
Pillen Family Farms is a farrow (birth) to finish pork production company based in Columbus. It has facilities throughout Nebraska and the Midwest. The closest to North Platte are a DNA Genetics gene transfer center near Cozad and a hog finishing operation near Imperial.

Tuesday, February 27, 2018

Tuesday Closing Livestock Market Summary - Cattle Futures Close Higher, But Well Off Session Highs

GENERAL COMMENTS
The feedlot trade remained at a standstill Tuesday with just a few bids of $126 noted in parts of the South. Our guess is cattle sellers will start out pricing showlists around $130 or better on a live basis. According to the closing report, the national hog base is .33 lower ($56.50-63.75, weighted average $62.52). Old-crop corn closed 2 cents higher, supported by further reports of dry conditions in Argentina. The stock market closed lower thanks in part to the fear of rising interest rates. The Dow settled 299 points lower while the Nasdaq lost 91.
LIVE CATTLE
This was one session that bulls would have preferred to ring the closing bell. While live contracts settled 10 to 62 points higher, April, June, and August slipped more than 100 points below session highs. On the other hand, April through August continue to respect general trendlines as defined by 40-day and 100-daying moving averages. Spot Feb is scheduled to expire at noon Wednesday. Beef cut-outs: higher, up .07 (select: $214.79) to $1.00 (choice: $220.52) with light to moderate demand and moderate offerings (66 loads of choice cuts, 31 loads of select cuts, five loads of trimmings, 16 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL:
Steady to $2 higher. Bids and asking prices could become better defined at midweek, but significant trade volume may not surface until Thursday or Friday.
FEEDER CATTLE:
Although most contracts managed to save triple-digit gains Tuesday (i.e., up 95 to 130), they continue to struggle for support in the wake of last Wednesday's crash. The stability of August probably looks the best in that regard, finding decent support where 40-day and 100-day moving averages converge (i.e., near 150.30). CME cash feeder index: 02/26: 147.76, off .54.
LEAN HOGS:
Lean futures closed mixed, up 40 to off 27. Spot April closed flat, trapped by both the discount of the cash index and rather towering overhead resistance at both the 40-day and 100-day moving averages. While the technical profiles of summer issues are nothing to take to the state fair, they continue to find at least token support near longer-term support lines (e.g., August settled Tuesday above its 40-day moving average. Pork cut-out: $79.53, off .74. CME cash lean index for 02/23: 69.32, off .46 (DTN Projected lean index for 02/26: 68.83, off .49).
WEDNESDAY'S CASH HOG CALL:
Steady to $1 lower. Opening hog bids in the morning are likely to be some weaker thanks to Tuesday's large country run and softening carcass value.

Tuesday Midday Livestock Market Summary - Cattle Futures Hold Firm Gains

GENERAL COMMENTS: 
Firm buyer support is moving into the cattle complex, which is likely to draw additional buyer support back to the table. This may firm underlying market shifts, and help to mobilize commercial buyers who have remained generally comfortable on the sidelines. Lean hog futures posted narrow market shifts through the morning. Corn prices are higher in light trade. March corn futures are 1 cent higher Tuesday. Stock markets are lower in light trade. The Dow Jones is 61 points lower while Nasdaq is down 45 points.
LIVE CATTLE:
Light to moderate buyer support is holding through the entire live cattle complex with prices ranging from 25 to 80 cents per cwt. The overall lack of follow through gains early in the session when prices were $1 per cwt higher in most nearby contracts is likely to limit follow through support late Tuesday. This could add some uncertainty to the entire complex. Cash cattle activity remains generally sluggish with just a few scattered bids developing in the South. Bids are seen at $126 per cwt, which is well expected for this time of week. Asking prices that have been floated are seen at $130 in the south. Asking prices and bids are unavailable in the North at this time for both live and dressed markets. It is expected to be midweek or later before active interest develops. Boxed Beef cut-outs at midday are higher, $0.04 higher (select) and up $0.74 per cwt (choice) with light movement of 84 total loads reported (46 loads of choice cuts, 22 loads of select cuts, 5 loads of trimmings, 12 loads of ground beef).
FEEDER CATTLE:
Firm buyer support is moving through the feeder cattle complex with traders focusing on increased buyer support leading the entire cattle complex higher. Prices have moved back from strong triple digit gains of near $2 per cwt higher early in the session, although firming support near $1 per cwt higher seems to be the move that most traders are willing to make at midday. The focus on additional moves in live cattle trade as well as potential firmness in outside markets could bring some late-day buying back into the complex.
LEAN HOGS:
Mixed trade is seen across the complex with prices hovering in single-digit price moves in nearby trade. This overall lack of direction is helping to build some stability following previous pressure, but is unable to bring back a sense of buyer support given the lack of overall strength in the market. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.28 at $63.13 per cwt with the range from $56.50 to $63.50 on 9,390 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is up $0.45 at $63.24 per cwt with the range from $58.00 to $63.50 on 2,070 head reported sold. The National Pork Plant Report posted 191 loads selling with carcass values falling $0.34 per cwt. Lean hog index for 2/22 is at $69.78, down 0.39 with a projected two-day index of $69.32, down 0.46.

Tuesday Morning Livestock Market Update - Pressure Expected Early Tuesday

GENERAL COMMENTS:
Follow-through pressure is expected to slowly develop early Tuesday morning with traders focusing on the inability to bring any stability back into nearby contracts Monday. This continues to have more impact on nearby live cattle contracts and the entire feeder cattle market with April live cattle futures within striking distance of breaking through short-term support levels. Moderate early losses would break through February lows, and create some underlying pressure through the entire complex. This may limit the potential for follow-through buying as liquidation continues across the complex. Cash cattle markets are expected to remain undeveloped across the complex with traders looking for increased overall activity through the rest of the week. Bids and asking prices are still likely to remain overall sluggish with limited direction seen through the complex until later in the week.
The continued pullback in lean hog futures has created additional market uncertainty through the end of the month. Nearby contracts have not pushed prices nearly $1.50 per cwt off of recent highs, which is opening the door for additional liquidation through the next several trading sessions. The potential for additional support to trickle into cash and pork cutout levels is helping to draw additional underlying support across the market, which may add even more support to the long-term direction of the market. Cash hog values are expected to still remain steady to weak with early bids likely to range steady to $1 per cwt lower once again as packers attempt to regain processing margins. Given the recent firmness of the market, most early bids and sales are likely to be seen steady to weak. Daily procurement levels are targeted at 465,000 head Tuesday.
BULL SIDEBEAR SIDE
1)
Strong underlying support quickly developed through the boxed beef market early in the week. This is creating additional underlying support, which is pushing choice boxed beef levels near $220 per cwt. The continued support in the beef values is focusing on the long-term demand expected to be building across the complex.
1)Renewed pressure in both live cattle and feeder cattle futures has created underlying market weakness through the complex. Nearby live cattle futures quickly followed the shift lower in feeder cattle. This pressure is limiting any need or desire for traders to move back into the complex over the next couple of sessions.
2)Firm buyer activity which redeveloped in deferred live cattle futures is helping to draw additional support through the complex. This may add even more support to the overall trade volume in the complex through the next couple of trading sessions.2)The increased placement levels of cattle through the month of January continue to limit overall market stability as traders are faced once again with the reality that aggressive beef levels will be available through the rest of the year. This is limiting both short-term and long-term price support.
3)Cash hog prices bounced higher late Monday, creating the expectation that some additional market firmness may continue to trickle into fundamentals through the end of the week.3)Despite the bounce higher in overall pork cutout values Monday, the increased volatility in primal cuts and wide ranging price swings through the complex is creating some significant uncertainty about the ability to continue to move pork prices higher through the end of the month.
4)Moderate gains were seen in pork cutout values early in the week. This is helping to draw additional support to the market as traders focus on the ability to move pork product during the spring months as the potential to increased overall movement domestically and in export markets will likely help to sustain recent gains.4)
Lean hog futures continue shift lower through the week, limiting the potential for additional buyer support moving into the complex. Although prices are still far away from breaking through support levels, the potential to draw substantial buyer activity into the market is becoming limited at the end of the month.

Monday, February 26, 2018

Monday Closing Livestock Market Summary - Firm Pressure Redevelops Monday

GENERAL COMMENTS
Cash cattle trade activity remains undeveloped with limited interest shown at this point. This is not unexpected with overall bids and asking prices not likely to actively develop until midweek. Trade is likely to be pushed off to the second half of the week, as traders focus on the split between futures and beef values seen over the last few days. According to the closing report, the national hog base is $0.28 higher compared with the prior day settlement ($56-$63.50) weighted average $62.89. The corn futures are higher in light activity. March futures were 2 cents higher Monday. The Dow Jones Index is 399 points higher with the Nasdaq up 84 points.
LIVE CATTLE
Live cattle futures closed mixed after trading mostly lower in most contracts through the session ($0.40 higher to $0.85 lower). Firm pressure redeveloped in nearby contracts following concern that additional selling activity will develop in feeder cattle trade through the week, and the weaker tone of the market may limit any stability in live cattle futures. Late-day support moved into the deferred contracts, which continues to drive additional longer-term buying back to the table. But this may not be enough to hold prices higher over the near future. Beef cut-outs: higher, $1.90 higher (select, $214.72) and up $1.15 (choice, $219.52) with moderate demand and light offerings (45 loads of choice cuts, 17 loads of select cuts, 9 load of trimmings, 12 loads of coarse grinds).
TUESDAY'S CASH CATTLE CALL:
Steady. Limited activity is expected to be seen through the complex with bids and asking prices undeveloped at this point. There is likely to be very little support seen in the complex to point to firming market levels. Most trade is likely to develop late in the week, after month-end and the futures market may see some market shifts.
FEEDER CATTLE:
Light-to-moderate pressure quickly developed across the complex ($0.17 to $0.55 lower) with traders focusing on limited trade and concerned with further market pressure. Very little long-term direction developed in the complex as traders focused on the bearish news in Friday's Cattle on Feed report, which showed overall cattle placement significantly higher than estimates. This caused only limited market pressure as the weakness in the complex through last week carried the brunt of market pressure. CME cash feeder index for 2/22 is $147.63, down $0.42.
LEAN HOGS:
Pressure developed across all lean hog futures with the focus on strong market pullbacks in nearby trade ($0.25 lower to $1.42 lower). Strong follow-through losses moved into the market, adding to the pressure that developed late last week. What started out as light-to-moderate position-taking following the run higher last week has potentially turned into a market shift with uncertainty about long-term support. There could be some additional buyer activity moving into the market, but the choppy moves in both pork values and cash trade is limiting underlying support. Pork prices firmed early in the week with moderate support developing in the pork cutout. Primal prices were mixed in a wide range as all markets moved with triple-digit shifts either higher or lower through the day. Pork cut-out: $80.27 up $0.79. CME cash lean index for 2/22 -- $69.78, down $0.39. DTN Projected lean index for 2/23 -- $69.32, down $0.46.
TUESDAY'S CASH HOG CALL:
Steady to $1 lower. Very little market direction is expected to develop through the hog complex given the recent market moves. Packers are expected to post most bids steady to weak early Tuesday morning as the general trend of the cash market is not expected to change. Tuesday plant runs are expected to hit 465,000 head.

Monday Midday Livestock Market Summary - Firm Weakness Floods Through Complex Monday

GENERAL COMMENTS: 
Wide-ranging pressure is seen in the livestock markets, which continues to draw sellers back into the market. Triple-digit losses are seen in most cattle markets, which may further weaken any support later in the week. Corn prices are higher in light trade. March corn futures are 3 cents higher Monday. Stock markets are higher in light trade. The Dow Jones is 340 points higher while Nasdaq is up 62 points.
LIVE CATTLE:
Triple-`digit losses have developed across the live cattle complex. There is very limited support seen in the market at this point with very sluggish market movement developing in nearby trade. The focus on additional market shifts lower may start to impact the overall trade direction long term. Cash cattle activity remains quiet with very little market direction developing across the complex. Showlists are larger in Kansas, but steady to lower in other areas. Bids and asking prices are undeveloped and likely to remain that way until midweek. Boxed Beef cut-outs at midday are higher, $1.32 higher (select) and up $0.28 per cwt (choice) with light movement of 43 total loads reported (19 loads of choice cuts, 7 loads of select cuts, 9 loads of trimmings, 8 loads of ground beef).
FEEDER CATTLE:
Light pressure seen early in the session has expanded to triple-digit losses in most contracts. This may bring increased pressure to the entire complex as follow-through pressure is being fueled by weakness in all cattle trade as well as a weaker tone in the cattle on feed report.
LEAN HOGS:
Light to moderate pressure is developing across lean hog futures with overall lack of support seen across the entire complex. Even though initial pressure is focused on a market correction following the recent gains, the concern that prices could continue to erode lower, and take away most of the market support seen in the complex. Nearby losses are seen from 70 to 90 cents per cwt with narrow losses developing in deferred contracts. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.49 at $63.10 per cwt with the range from $56.00 to $63.36 on 3,197 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $0.90 at $61.70 per cwt with the range from $56.00 to $62.00 on 257 head reported sold. The National Pork Plant Report posted 161 loads selling with carcass values adding $0.64 per cwt. Lean hog index for 2/22 is at $69.78, down 0.39 with a projected two-day index of $69.32, down 0.46.

Scouring calves need fluids, fast

Scouring calves can go downhill quickly. Act fast to save a calf.
Calving time means the potential for scours. In fact, gut infections and the resulting diarrhea and electrolyte imbalances the scours produce is the leading cause of death in very young calves.
But proactive support can save calves. That means getting fluids into a scouring calf, fast. Most producers know how to use an esophageal feeder for giving fluids and some use a nasogastric tube.  These are quick and easy ways to get electrolyte fluids into the calf and a safe way to do it if you know how.
“If the calf still has a suckle reflex (able to suck on your finger) we can use the esophageal feeder,” says Geof Smith, with the College of Veterinary Medicine at North Carolina State University. A person just needs to be careful and slow when putting the probe down the throat, making sure it goes down the esophagus and not into the trachea (windpipe). 
Most problems occur when the probe is rammed down quickly. Because of the ball on the end, the probe is not supposed to be able to go into the trachea, but you should always check by palpating the neck. “Make sure you can feel two tubes; you should be able to feel the plastic tube separately from the trachea. Once you get the probe safely down the esophagus you can administer the electrolyte fluid,” Smith says.
Once the calf has been rehydrated, should you turn it back out with the cow? In years past, veterinarians recommended holding scouring calves off milk for 24 hours, simply feeding electrolyte solutions, but today that is no longer advised.
“The old philosophy was that milk would likely make the diarrhea worse, but more recent research refutes this,” says Derek Foster, professor of ruminant medicine, North Carolina State University College of Veterinary Medicine. “Milk helps the calf maintain strength and body weight while recovering. Calves held off milk tend to lose weight. We prefer to keep them on milk as long as they are up and able to nurse the cow.”

Monday Morning Livestock Market Update - Moderate Price Shifts Expected

GENERAL COMMENTS:
Early trade Monday is expected to start steady to weak with the overall pressure from last week likely to carry into the market. The Cattle on Feed report on Friday afternoon came in neutral to bearish following spot-on marketing levels, while both placements and total Cattle on Feed numbers were increased from early estimates. The main focus was on the bounce higher in placements, focusing on additional longer-term supply available to the market through the rest of the year. Cash cattle activity is likely to remain undeveloped with showlist distribution and inventory-taking the main order of business.
Strong support late last week is creating some uncertainty as traders have not started to adjust markets for end-of-month activity. This could add even more volatility to the market, although traders are now going to be closely following the ability to push market fundamentals higher in order to sustain the recent futures support. There will be even more emphasis on the direction in both cash hog and pork cutout values over the next couple of days. Early cash hog bids are expected to be steady to $1 lower Monday morning with most bids likely to be steady to weak. Daily procurement levels are targeted at 463,000 head Monday.
BULL SIDEBEAR SIDE
1)Cattle marketed during the month of January is seen at 106%. This is spot on with early market expectations and continues to focus on the ability to aggressively move beef through early 2018.1)Aggressive moves higher in cattle placements in feedyards during the month of January is likely to limit long-term support in the feeder cattle futures.
2)Despite the volatility in the cattle futures through last week, boxed beef values continue to show aggressive and firm market support. This is likely to help draw additional underlying support through the entire complex.2)Live cattle futures pulled back further once again Friday. Although most of the late-week activity was based on position taking, the overall lack of buyer support is expected to bring additional underlying concerns to the market as market volatility may be evident over the near future.
3)Strong continued buyer support continues to develop through lean hog futures following the $4 market rally that started to develop last week. Additional upward market activity is likely through the end of the month.3)Continued pressure in cash hog values despite a strong market rally in the futures trade is likely to add limited support to the market as traders still are focusing on the inability to bring this support to underlying fundamental markets.
4)Price stability and narrow gains have slowly developed in pork cutout values. This is likely to build even more momentum across the entire complex as traders look for increased underlying support in both futures and cash market trade during early March.4)
The mixed trade on Friday is expected to bring a sense of market correction back into the market Monday morning. With traders focusing on the unchecked gains over the last few days, and end of the month adjustments still likely, additional market swings are likely Monday.

Friday, February 23, 2018

Friday Closing Livestock Market Summary - Mixed Trade at End of Week

GENERAL COMMENTS
From Friday to Friday, livestock futures scored the following changes: Feb LC off $2.10; Apr LC off $2.80; Mar FC off $3.72; May FC off $3.45; Apr LH up $3.22; May LH up $2.68. Cash cattle trade was light to moderate during the day with clean-up activity seen in all areas. Prices were generally steady with the previous week's trade as the tone of the market was set midweek. Live cattle trade held at $128 per cwt while dressed activity was seen from $204 to $206 per cwt, with most sales steady to $1 per cwt lower than the week previous. It is likely that active market trade will not develop until midweek or later next week, which could limit additional market direction. According to the closing report, the national hog base is $0.93 lower compared with the Prior Day settlement ($57.00-$63.75) weighted average $62.63. Corn futures were lower in light activity with March futures down 1/2 cent Friday. The Dow Jones Index is 347 points higher with the Nasdaq up 127 points.
LIVE CATTLE
Narrow trading ranges developed late in the day Friday following what turned into moderate-to-strong pressure through most of the session. Prices were contained to a narrowly mixed range as traders tried to adjust positions for the weekend ($0.22 higher to $0.52 lower). Narrow losses developed in nearby cattle trade, but late-day market shifts helped to bring light buyer activity back to the table. USDA reported Friday that Cattle on Feed totals as of Feb. 1 increased 0.5% over early market estimates. This is not expected to have a major impact on the market, as marketing levels in January were on target with expectations. The main focus will be on the increased placements in January, which will likely add to the weakness in the market next week. Beef cut-outs: mixed, $0.76 higher (select, $212.82) and down $0.03 (choice, $218.37) with light demand and offerings (25 loads of choice cuts, 15 loads of select cuts, 4 load of trimmings, 29 loads of coarse grinds).
MONDAY'S CASH CATTLE CALL:
Steady. Activity and interest in the cattle markets early next week will likely follow trade that developed through the middle of the week. Interest in the cash market is likely to be limited to showlist distribution and inventory taking most of Monday.
FEEDER CATTLE:
Mixed feeder cattle trade developed late Friday as traders tried to anticipate the January Cattle on Feed report. This left prices in a narrow trading range following early market shifts ($0.52 lower to $0.42 higher). Traders stepped into the market at the end of the week with the intention of trying to square positions and cover short positions before the weekend. But this only had limited success, as the overall tone of the market still remains weak, and sparked another round of selling through early trade. Total placements in January came in 3% over the early estimate and above all market ranges. This is likely to have a weakening effect on the market once markets open Monday. CME cash feeder index for 2/22 is $147.63, down $0.42.
LEAN HOGS:
Light trade was seen Friday as traders focused more on market corrections than any significant market shifts over the last couple of days. This left prices mixed in a narrow range (0.02 lower to 0.17 higher). Early market activity was offset by position-taking through the last half of the trading session with early losses quickly being eroded through the day. Even though gains remained narrow at closing bell, the focus on market firmness continues to be the main direction in the complex as traders look for increased activity early next week. Pork prices bounced higher on firm support in most primal cuts. All cuts except ham markets posted gains at the end of the week, allowing firm overall market support. Pork cut-out: $79.48 up $0.78. CME cash lean index for 2/21 $70.17, down $0.61. DTN Projected lean index for 2/22 $69.78, down $0.39.
MONDAY'S CASH HOG CALL:
Steady to $1 lower. Limited overall trade activity is expected to be seen over the next few days with traders still focusing on the weakening market range steady to $1 per cwt lower. Most bids are expected to remain steady early in the week with more focus on futures trade activity late in the month. Processing schedules are expected to be 462,000 head Monday.

Friday Midday Livestock Market Summary - Light Trade Keeps Futures Weak Friday

GENERAL COMMENTS: 
Light to moderate pressure is seen in most livestock trade as cattle futures continue to erode due to concerns of additional pressure developing in the near future. Hog trade is focusing on end-of-week position squaring, as limited losses are seen Friday morning. Corn prices are steady to lower in light trade. March corn futures are 1/2 cent lower Friday. Stock markets are higher in light trade. The Dow Jones is 137 points higher while Nasdaq is up 59 points.
LIVE CATTLE:
Moderate to firm losses have quickly developed through the live cattle futures market. Traders are also focusing on the inability to bring additional volume to the market at the end of the week. Some late-day market shifts may continue to develop as traders focus on the upcoming cattle on feed report. This may add even more uncertainty to the complex and spark some early-week market shifts Monday morning. Cash cattle bids have developed at $128 live through the South and $202 dressed in the North through the morning. Although there may still be a few cattle needing to be sold, it appears that for the most part both sides seem comfortable with previous market activity. This could allow for markets to remain at current levels with activity next week focusing on end-of-month needs also. Boxed beef cut-outs at midday are mixed, $0.83 higher (select) and down $0.32 per cwt (choice) with light movement of 39 total loads reported (15 loads of choice cuts, 7 loads of select cuts, no loads of trimmings, 17 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures have traded moderately lower through most of the morning, although prices have tried to break out of the lower market moves. This could add even more softness to the complex over the near future, as traders continue to focus on increased activity through the next couple of days. March futures are unchanged in light midday trade as the potential for late-day support may move back into the market.
LEAN HOGS:
Light pressure is slowly trickling into the lean hog complex Friday morning following a strong market rally over the last two sessions. This overall support seen in the market has quickly pulled prices well off of recent lows, but traders are now starting to focus on end-of-week positioning, which could lead to increased volatility. The strength in the market continues to hold, but could draw additional buyer activity back to the market over the next week. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.73 at $62.83 per cwt with the range from $57.00 to $63.75 on 3,252 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $0.52 at $63.19 per cwt with the range from $62.00 to $63.75 on 492 head reported sold. The National Pork Plant Report posted 135 loads selling with carcass values adding $0.77 per cwt. Lean hog index for 2/21 is at $70.17, down 0.61 with a projected two-day index of $69.78, down 0.39.

Friday Morning Livestock Market Update - Mixed Livestock Trade Expected

GENERAL COMMENTS:
Light trade activity is expected to be seen early Friday morning, although the tone of the market continues to be focused on the previous market pullback that may add even more softness to trade through the morning. There is also expected to be some pre-report positioning ahead of the cattle on feed report in both live cattle and feeder cattle trade. Cash markets appear to be well established with prices steady to $2 per cwt lower. It appears that more cattle will likely still need to be sold given the trickle of trade over the last few days. But unless something major is seen across the complex or in the cattle on feed report, prices appear to be set.
Additional buyer support is expected to be seen early in the session Friday, although the recent rally is expected to create some additional market adjustments with traders looking for increased market activity and the $3 per cwt market rally over the last couple of days. Cash hog prices are still expected to remain steady to weak with bids likely to be seen anywhere from steady to $1 per cwt lower through the morning. The rally in the futures trade has still not created a significant shift in packer spending as packers are still trying to control spending following previous margin pressure. Daily procurement levels are targeted at 451,000 head Friday with an estimated 134,000 head on Saturday.
BULL SIDEBEAR SIDE
1)Light buying support moving into deferred live cattle futures trade Thursday helped to bring about a sense of stability in the market. This is likely to help create some additional price support and buying momentum at the end of the week.1)The pullback off of 2018 highs through the week in live cattle futures has created additional market pressure that is continuing to cause longer-term questions about just how much buyer support remains in the complex. With triple-digit losses seen once again in February contracts, the entire complex remains generally weak.
2)Expected increases in cattle marketed in January on the upcoming cattle on feed report is expected to help support overall demand expectations not only short term, but through the upcoming spring and summer months.2)Increased cattle on feed numbers in the upcoming report which will be released Friday afternoon is expected. The current projection is that overall cattle on feed levels will increase 7% over 2017 levels, accounting for not only increased cattle available to the market, but also a steady string of 11 straight months of feedlot growth.
3)Aggressive triple-digit rallies have changed the direction of the lean hog complex after testing long-term market lows over the last couple of weeks. This $3 rally in nearby contracts is helping to create expectations of additional long-term support.3)Cash hog prices are still unable to inch higher due to the consistent pressure by packers to limit spending activity and try to improve margins. This could continue to erode overall cash markets through the week and widen the spread between futures trade.
4)Active packer movement through the week combined with moderate to strong weekend hog movements through plants continues to keep the supply chain well balanced and is limiting a backlog of hogs to build up due to the ability to aggressively move hogs and pork through the system.4)
Pork values have been extremely slow to respond to the latest round of aggressive futures support. This is likely to help to draw additional activity into the market, but strong pork product increases may still not be able to develop.

Thursday Closing Livestock Market Summary - Strong Gains Developing in Hog Futures

GENERAL COMMENTS
Cash cattle trade has slowly trickled into the market over the past couple of days. Prices are seen once again at $128 live basis, steady with Wednesday's trade, but still $2 per cwt lower than last week. Dressed activity is slightly more defined with trade at $204 to $205 per cwt. This is steady to $1 per cwt lower than last week. It is expected that even though more trade may develop Friday, the tone of the market has been set at these price levels. There could be some additional market shifts in futures, but not a lot of direction is expected to cash trade. According to the closing report, the national hog base is $0.43 lower compared with the Prior Day settlement ($57-$64.25) weighted average $63.50. March corn futures were 1 cent higher in light trade activity Thursday. The Dow Jones Index is 164 points higher with the Nasdaq down 8 points.
LIVE CATTLE
Mixed trade developed in the last half of the trading day with early pressure giving way to narrow gains in deferred contracts ($0.22 higher to $1.30 lower). The underlying tone of the market remains extremely weak with front-month February futures holding triple-digit losses. But the inability to follow the aggressive pressure seen midweek is actually helping to stimulate some expectations that prices may bounce higher at the end of the week. Beef cut-outs: higher, $0.14 higher (select, $212.06) and up $1.03 (choice, $218.40) with light demand and offerings (70 loads of choice cuts, 12 loads of select cuts, 5 load of trimmings, 11 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL:
Steady with early week Trade. It is expected that some additional trade will develop Friday unless another round of activity is seen late Thursday afternoon or evening. But the tone of the market is likely to be set, with prices through the rest of the week likely to be seen at $128 live basis and $204 to $205 dressed.
FEEDER CATTLE:
Light-to-moderate pressure redeveloped in feeder cattle trade. This left prices looking for longer-term support, but unable to find a sense of stability Thursday ($0.27 to $1.02 lower). Moderate nearby contract weakness led the complex lower with April futures holding a $1.02-per-cwt loss. Even the expected stability in overall feeder cattle placements in January that likely will be seen in the Cattle on Feed report was unable to draw buyers back to the market. Deferred futures posted narrow losses, with the more intensive pressure reserved for nearby trade. CME cash feeder index for 2/21 is $148.05 up $0.06.
LEAN HOGS:
Strong gains redeveloped in lean hog futures as traders focused on follow-through pressure in the cattle trade, but pushed higher as follow-through buyer interest developed (0.47 to 1.37 higher). Triple-digit gains were seen at closing bell in all 2018 contracts as the overall support in the complex is helping to not only bring firm commercial buyer support back to the market, but is also helping to add even more strength to the lean hog complex. The moves helped to push prices above last week's highs, although the strong pressure in the market seems to be still limiting the buyer activity as prices remain well below short-term resistance levels. Narrow pressure was posted in pork prices with mixed primal moves seen Thursday. This could lead to additional end-of-the-market shifts through the complex. Pork cut-out: $78.70 down $0.03. CME cash lean index for 2/20 $70.78 down $0.63. DTN Projected lean index for 2/21 $70.17 down $0.61.
FRIDAY'S CASH HOG CALL:
Steady to $1 lower. Early morning cash market calls seem to be a broken record as of late. Even though futures trade has found renewed support, packers are able to continue to offer starting bids at steady to $1 per cwt lower. Most trade is expected to remain steady to weak early Friday, but the need to access weekend procurement levels is likely to help draw additional support. Processing schedules are expected to be 452,000 head Friday. Saturday runs are expected at 135,000 head.

Thursday, February 22, 2018

Thursday Midday Livestock Market Summary - Additional Losses Sweep Through Cattle Trade

GENERAL COMMENTS: 
Follow-through pressure has continued to develop in cattle trade with the focus split between pressure developing in the cash cattle markets and additional weakness seen as prices reach technical tipping points. Hog trade is holding firm support Thursday. Corn prices are steady to higher in light trade. March corn futures are 3/4 cent higher Thursday. Stock markets are higher in light trade. The Dow Jones is 303 points higher while Nasdaq is up 45 points.
LIVE CATTLE:
Lower trade continues to be seen in most live cattle futures, although prices have been seen in a very wide range of movement through the morning. At midday prices range from $1.27 per cwt lower to 12 cents per cwt higher. The overall lack of buyer support seen in nearby contracts has caused widespread nearby market losses to redevelop. But deferred futures remain steady to slightly higher as the focus on lack of additional trade moving into the market may help to allow market firmness. There continues to be some additional longer term trade activity developing in the complex as traders are focusing on the ability to not only adjust prices, but stabilize open interest at the end of the week. Cash cattle trade is starting to slowly pick up in the North with dressed trade reported at $204 to $205 per cwt. These prices are steady to $1 per cwt lower than last week, and may be the trend for the week even though more activity is expected to develop before the end of the week. Live bids are being restated at $127 to $128 live basis. Prices of $128 per cwt were able to establish light sales activity Wednesday, but the overall uncertainty of the market may continue to limit trade at these levels. But packers continue to need cattle to keep chain speed active through the end of the month. Asking prices remain firm at $130 live basis and $205 dressed. Boxed beef cut-outs at midday are higher, $0.22 higher (select) and up $0.04 per cwt (choice) with light movement of 57 total loads reported (42 loads of choice cuts, 9 loads of select cuts, no loads of trimmings, 6 loads of ground beef).
FEEDER CATTLE:
Firm pressure is seen through feeder cattle futures once again Thursday. Even though markets have been contained to moderate losses through the morning, there is still an uneasiness surrounding the entire complex as prices seem to have a hard time finding any sense of short-term support. Prices are holding within a range of 30 to 60 cents per cwt lower as the overall lack of direction in the market continues to focus on increased market pressure and the late-month pullback from previous highs.
LEAN HOGS:
Firm follow-through support has quickly moved into the lean hog complex Thursday with prices 80 cents to $1 per cwt higher during most of the morning trade. Price levels have changed very little during the morning after initial position taking developed and increased volume was seen through the complex. The inability to move prices higher is focusing on the overall lack of new interest seen in the market, although prices have broken through last week's highs in search of additional underlying support. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.57 at $63.36 per cwt with the range from $57.00 to $63.50 on 2,370 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report posted 177 loads selling with carcass values adding $0.88 per cwt. Lean hog index for 2/20 is at $70.78, down 0.63 with a projected two-day index of $70.17, down 0.61.