Aggressive pressure has quickly swept through the livestock market with triple-digit losses in cattle and hog markets. The sharp gains seen earlier in the week are causing some traders to square positions, while others remain concerned about additional long term pressure that could continue to develop based on world trade activity. Corn prices are lower in light trade. May corn futures are 1 cent lower. Stock markets are lower in light trade. The Dow Jones is 400 points lower while Nasdaq is down 79 points.
LIVE CATTLE:
Sharp losses have continued to trade sharply lower with June contracts reaching $2.77 per cwt lower at midday. This has the potential to move prices to limit losses through the end of the session, eroding any support that has developed over the last couple of trading sessions. With all of the talk and focus on potential tariffs to China and just how this will affect short and long term prices, markets remain extremely volatile and that may continue to be the case over the near future. Typically these type of tariff negotiations are a, long drawn-out process that could take months before the dust settles. One has to wonder that if this process does take that long, will trade become "bored" with the overall uncertainty as it becomes old news in the industry and market. Traders have a tendency to jump on the newest news cycle and quickly forget about things previously in the works. But it will be interesting to see just how closely livestock futures trade continues to follow all of these moves once the "newness" factor fades. Cash cattle remain untraded at this point Friday. Current bids are seen at $118 and lower on a live basis, and $184 to $186 per cwt. The pressure in futures trade has weakened packer interest at midday. Asking prices are still well above bids but becoming more defensive. It is uncertain just how many more cattle packers have to buy through the week until they can limp through until early next week when they may be able to pick up additional cattle. Boxed Beef cut-outs at midday are mixed, $0.61 higher (select) and down $0.55 per cwt (choice) with active movement of 119 total loads reported (75 loads of choice cuts, 16 loads of select cuts, 8 loads of trimmings, 21 loads of ground beef).
FEEDER CATTLE:
Sharp losses have quickly moved into the cattle complex Friday. Although a portion of the weaker futures trade is likely associated with end of week positioning. Concerns that traders will see additional tariff issues over the near future will continue to add concern to the market. Most contracts are holding $2.50 to $3 per cwt losses even though trade volume remains sluggish.
LEAN HOGS:
Sharp losses have redeveloped at the end of the week. Continued longer term pressure has added even more uncertainty to the entire livestock market. Nearby pork futures are holding losses of $1 per cwt or greater in nearby contracts as the concern of further tariff talks has quickly brought additional pressure back into the market. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.39 at $44.74 per cwt with the range from $42.00 to $44.89 on 2,458 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 166 loads selling with carcass values falling $1.52 per cwt. Lean hog index for 4/4 is at $55.27 down 0.33 with a projected two-day index of $54.75, down 0.52.
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