GENERAL COMMENTS:
Cattle contracts lost their support midday afternoon Tuesday and couldn't close the day with higher prices throughout any of the sector. Meanwhile, the lean hog market closed fully higher even with cash prices being lower.
Hog prices close lower on the National Direct Afternoon Hog Report, down $0.10 with a weighted average of $50.12. May corn is up 5 3/4 cents per bushel and May soybean meal is up $1.20. The Dow Jones Industrial Average is down 785.91 points and NASDAQ is down 268.07 points.
LIVE CATTLE:
Live cattle contracts fell through closing Tuesday, with more position lost in deferred contracts than nearby. April live cattle closed $0.05 at $110.10, June live cattle closed $0.60 lower at $103.37 and August live cattle closed $0.80 lower at $103.55. This may seem like somewhat of a kick to the teeth because the market was vibrant coming into the week and closed higher, but its crucial that we all remember in times like these that the market is laced with emotion and uncertainty. Trends take time to establish and it takes even longer for cattle producers and traders alike to shake bad news. Cash cattle trade has yet to surface and feeders are hesitant on placing bids on their cattle too soon. Both packers and feeders want to see where this week is headed before business gets underway.
Boxed beef prices closed higher: choice up $1.23 ($206.53) and select up $2.25 ($201.16) with a movement of 79 loads (47.74 loads of choice, 14.16 loads of select, 7.69 loads of trim and 9.10 loads of ground beef). Tuesday's slaughter is estimated at 124,000 head, steady with a week ago and 3,000 head more than a year ago.
WEDNESDAY'S CASH CATTLE CALL: Steady. It takes a strong market to concur and push higher when the future's market is lower and right now the cash market has little to no leverage.
FEEDER CATTLE:
Feeder cattle contracts feel through closing and tumbled lower hand in hand with live cattle contracts. March feeders closed $0.20 lower at $133.52, April feeders closed $1.27 lower at $133.77 and May feeders closed $1.92 lower at $134.05. As you can see the board and the cash market are in turmoil. It's important to remember that even though there may be some good days with higher prices and higher closings, trends take time to establish.
At OKC West Livestock Auction in El Reno, Oklahoma, 1,500 head of feeders sold, and in comparison to last week steer calves sold $3.00 to $8.00 higher, with instances of 400 to 500 pound steers bringing $10.00 higher. Heifers calves traded $5.00 to $10.00 higher as well. Demand was phenomenal, and quality was just average. The CME feeder cattle index 3/2/2020: up $0.48, $134.00.
LEAN HOGS:
The lean hog market was the only livestock contract able to close the day steadily higher. April lean hogs closed $0.75 higher at $63.55, June lean hogs closed $1.05 higher at $78.07 and July lean hogs closed $1.50 higher at $79.47. Some of vibrancy coming from the lean hog market could be stemming from the China's announcement that they have developed a vaccine for ASF. They did not share when the vaccine will be on the market, but progress is being made. Pork cutouts totaled 387.45 loads with 347.80 loads of pork cuts and 39.65 loads of trim. Pork cutout values: down $0.05, $66.05. Tuesday's slaughter is estimated at 495,000 head, steady with a week ago and 20,000 head more than a year ago. The CME lean hog index 2/28/2020: down $0.08, $56.25.
WEDNESDAY'S CASH HOG CALL: Steady. With so much commotion pinging off the market, cash hogs could trade higher with positive news about the African swine fever vaccine, but if more news about the coronavirus breaks the market could easily trade lower.
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