GENERAL COMMENTS:
Monday came and wreaked havoc on livestock contracts, pushing the cattle contracts especially lower. As many contracts fall to new lows, producers and traders wonder how much lower the market is going to fall before the bottom is established. Hog prices close higher on the National Direct Afternoon Hog Report, up $0.34 with a weighted average of $51.30. May corn is down 3 1/4 cents per bushel and May soybean meal is down $4.70. The Dow Jones Industrial Average is down 2,013.76 points and NASDAQ is down 624.94 points.
LIVE CATTLE:
Monday closed with sharp losses in live cattle contracts that ranged from $2.67 lower to $3.00 lower throughout the complex. April live cattle closed $2.90 lower at $102.85, June live cattle closed $2.92 lower at $97.10 and August live cattle closed $3.00 lower at $98.07. There's no denying that prices are feeling pinched and pressured from every angle right now, but what's also concerning is the long-term effect that this could have on this summer's fat cattle market. As the market prepares to enter into what most would consider the largest supply of readily available fed cattle supplies, the market isn't in a place where there's margins to give. The country remains mostly quiet with asking prices noted around $112 to $113 live, and $180 dressed. New showlists appear to be mixed, lower in the South, but somewhat higher in Nebraska/Colorado.
Boxed beef prices closed lower: choice down $0.11 ($207.36) and select down $0.25 ($202.32) with a movement of 92 loads (53.87 loads of choice, 9.76 loads of select, 16.54 loads of trim and 11.40 loads of ground beef).
Monday's slaughter is estimated at 122,000 head .1,000 head more than a week ago and 2,000 head more than a year ago.
TUESDAY'S CASH CATTLE CALL: Lower. It wouldn't be surprising to see trade develop early in the week if the futures market keeps rolling lower like it did Monday. Feeders are feeling the financial burden of the coronavirus more than most and need to secure some profits rather than potentially none. If the board happens to trade sideways, then cash cattle trade could wait until later in the week to develop.
FEEDER CATTLE:
Closing the day with limit losses throughout the feeder cattle complex drove many contracts to new contract lows. March feeders closed $4.50 lower at $126.20, April feeders closed $4.50 lower at $125.55 and May feeders closed $4.50 lower at $126.65. Monday spun out of control and as the day progressed prices dropped lower and lower, feeling increasingly pressed by the fear of the coronavirus and the effects it's having on the economy and external markets.
At Joplin Regional Stockyards in Carthage, Missouri, 5,700 head of feeders sold, and compared to last week steer and heifer calves were $3.00 to $8.00 lower, yearling steers were $4.00 to $6.00 lower, 800 weight steers were $8.00 lower and yearling heifers were $2.00 to $5.00 lower. The driving force of Monday's softer feeder cattle prices was largely accredited to the weaker prices on the board. The CME feeder cattle index 3/6/2020: up $0.95, $134.82.
LEAN HOGS:
The only sign of support that came from Monday's trade was that the cash hog market was able to close slightly higher and the lean hog contracts didn't close with triple-digit losses. April lean hogs closed $2.92 lower at $63.00, June lean hogs closed $2.40 lower at $77.35 and July lean hogs closed $2.65 lower at $78.30. Pork cutouts total 280.01 loads with 252.55 loads of pork cuts and 27.45 loads of trim. Pork cutout values: up $1.09, $67.95. Monday's slaughter is estimated at 497,000 head, 2,000 head more than a week ago and 26,000 head more than a year ago. The CME lean hog index 3/5/2020: up $0.19, $56.98.
TUESDAY'S CASH HOG CALL: Lower. Monday may have been able to push cash hogs higher, but as time presses on the emotional toll of Monday's sharp drop in prices will most likely continue to erode the market.
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