Monday Closing Livestock Market Update - Market Losses Continue

GENERAL COMMENTS:

Livestock markets once again tumbled lower with triple-digit losses Monday. Another round of sharp losses in stock markets kept traders unsettled early in the week. Prices actually found very limited and short-lived support early Monday morning, but this was unable to get enough buyer momentum to keep prices stable, allowing for strong losses at the closing bell to be seen in most contract months. Continued panic selling surrounding tariff implications to global markets, product demand and the overall economy. It is likely that until financial and stock markets find a sense of stability, livestock trade will continue to maintain a general bearish tone. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.27 with a weighted average of $87.4 on 2,167 hogs. May corn closed up 4 1/4 at $4.645 and May soybean meal closed up $5.30 at $288.4. The Dow Jones Industrial Average is down 349.45 at 37,965.41.

LIVE CATTLE:

Live cattle futures continued lower Monday with active losses seen in all contract months. June and August futures led the complex lower with losses exceeding $4 per cwt at the closing bell. Nearby live cattle futures have tumbled over $13 per cwt in less than a week, quickly moving below the 40-day moving average and coming very close to breaking below the 100-day moving average. These moves if they continue to be sustained, would likely trigger additional technical pressure through the complex, although so far most of the market movement has been focused strictly on outside market moves and tariff concerns. This has left limited amount of focus on either fundamental or technical characteristics of the live cattle market. Even with the active losses Monday, expanded trade limits were not touched, leaving markets able to move back to normal trade limits Tuesday morning. This is a sense of relief and is creating some stability through the entire livestock complex. Cash cattle markets are extremely quiet with bids and asking prices yet to be established. It is likely that any significant trade volume will be pushed off to the last half of the week. April live cattle closed $3.70 lower at $198.925, June live cattle closed $4.03 lower at $194.175 and August live cattle closed $4.18 lower at $190.525. Monday's slaughter is estimated at 108,000 head, 4,000 head more than a week ago and 12,000 head less than a year ago. 

Boxed beef prices closed mixed: choice up $0.08 ($338.45) and select down $0.66 ($317.18) with a movement of 102.27 loads (64.20 loads of choice, 13.71 loads of select, 17.81 loads of trim and 6.55 loads of ground beef).

TUESDAY'S CATTLE CALL: Steady to $2 Lower. Cash activity is expected to remain quiet until mid-week or later. However, both sides are expected to slowly trickle into the market to figure out how much impact recent futures trade losses have had on cash markets for the coming week.

FEEDER CATTLE:

Feeder cattle continue to move sharply lower with the exception of spot month April contracts. Although April futures did close lower with triple-digit losses, the $1.60 per cwt tumble in spot contracts was just half the pressure seen in May contract months. Given the volatility in all other markets, continued concern and uncertainty about tariff implications, and impending trade wars, there is very little going on in the market that is directly focused on feeder cattle market fundamentals. If there was a positive for the day with additional sharp losses, it would be that feeder cattle markets avoided expanded trading limits, allowing normal daily trade limits to be back in place Tuesday morning. April feeders closed $1.60 lower at $277.825, May feeders closed $3.60 lower at $271.275 and August feeders closed $3.00 lower at $278.05. The CME Feeder Cattle Index for April 3: down $1.95, $290.00.

LEAN HOGS:

Lean hog futures officially closed mixed Monday despite the overall tone of the market remaining bearish. Spot month April lean hog futures etched out a 42 cent per cwt gain in limited trade to start out the week. This ability to break away from widespread market losses was very limited with all other contracts posting triple digit losses at the closing bell. The reality of the matter is that impending trade wars and tit-for-tat tariffs with China has very little impact in either pork or lean hog prices already in the marketing process. This is why the most aggressive losses are seen well into the 2025 marketing year, and why additional sharp losses could develop in these deferred contracts if traders do not feel any sense of market stability or progress being made. April lean hogs closed $0.43 higher at $87.8, May lean hogs closed $1.05 lower at $84.075 and June lean hogs closed $1.50 lower at $90.05. Monday's hog slaughter is estimated at 488,000 head, 24,000 head more than a week ago and 22,000 head more than a year ago. Pork cutouts totaled 268.91 loads with 239.84 loads of pork cuts and 29.07 loads of trim. Pork cutout values are up $1.43 at $95.77. The CME Lean Hog Index for April 3: down $0.36, $88.36.

TUESDAY'S HOG CALL: Steady. Early cash hog bids early Tuesday morning are expected to remain steady to weak. The long-term direction of futures trade and expected demand shifts has limited impact on immediate needs of packers at this point. Although cash prices will move in the direction of futures market, the ability to keep pork values elevated in the short-term should disrupt widespread cash market shifts.