GENERAL COMMENTS:
Lean hog futures turned into the bright spot in not only livestock markets, but most ag commodity markets Monday afternoon. June lean hog futures led the complex higher with a gain of over $3 per cwt as previously subdued buyer support quickly and aggressively developed in all lean hog contracts. Very little changed in the overall pork market fundamentals following the Easter Weekend, but previous market pressure, which kept prices well below the 40-day moving averages in most nearby contracts, sparked renewed technical support heading into the heart of April. Cattle futures remained much more subdued Monday, with nearby feeder cattle futures under pressure for most of the trading day, while live cattle futures were able to post light to moderate gains in most contracts, while spot month April contracts held strong end-of-the-session gains. Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.96 with a weighted average of $89.39 on 467 hogs. May corn closed up 1 3/4 at $4.54 and May soybean meal closed up $1.40 at $316.6. The Dow Jones Industrial Average is up 165.21 at 46,669.88.
LIVE CATTLE:
Live cattle futures seemed to carry the positive momentum seen last week into weekly trade, with light to moderate gains developing in most contract months. Spot month April contracts seemed to be the exception to the rest of the market complex, with prices holding triple-digit gains in the lightly traded but still very supported April contract month. The sharp market rally over the past couple of weeks has continued to add momentum to the entire complex, helping traders focus on the potential of reaching and exceeding previous contract highs. Fundamentally, the market remains extremely hot with very limited news available that would change supply or demand factors in the near future. But how much additional technical buying support is still to be developed is the main question that very few market observers can easily answer. The announcement over the weekend that workers have voted to end the strike at JBS's Greeley plant. This will likely help create additional processing room, but given the tight supplies of beef currently, it is uncertain what the short-term impact will be on futures or beef values. Cash markets remain totally undeveloped, with a typically quiet Monday, with the cash cattle trade at a complete standstill. Bids and asking prices are not established, and significant trade volume will likely be delayed until much later in the week. April live cattle closed $1.83 higher at $248.025, June live cattle closed $0.70 higher at $247.025 and August live cattle closed $0.70 higher at $242.875.
Monday's slaughter is estimated at 101,000 head, 9,000 head more than a week ago and 4,000 head less than a year ago.
Boxed beef prices closed higher: choice up $0.26 ($388.04) and select up $2.18 ($388.37) with a movement of 76.18 loads (55.39 loads of choice, 5.84 loads of select, 7.33 loads of trim and 7.62 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. Limited activity is expected to be seen in cash cattle activity the early part of the week. Continued focus on futures direction and beef values will be needed before asking prices and bids start to develop.
FEEDER CATTLE:
Feeder cattle futures broke away from the recent skyrocketing market trend seen over the past few trading sessions. April and May contracts closed lower after holding firm losses through most of the session. Although very little has changed within the cattle or beef market in general, it seems that at least temporarily, buyer support has slowed as traders try to catch their breath at current price levels, and look for additional market direction and a clear path forward for the rest of April, or at least the next few trading days. Given the market volatility, it seems that fewer are focusing on long-term market moves, with the attention being placed on shorter news cycles and the overall direction of trade over the next two weeks, as the overall cattle supply outlook is not likely to change in the coming months. April feeders closed $0.88 lower at $372.025, May feeders closed $0.28 lower at $370.35 and August feeders closed $0.33 higher at $369.825. The CME Feeder Cattle Index for April 1: down $2.26, $364.55.
LEAN HOGS:
Lean hog futures quickly developed into the bright spot of livestock futures Monday and seemed to be the focus of all ag commodities during early week trade. Although very little has changed in the supply and demand balance of the hog and pork market, renewed technical support became the main driver of higher moving prices Monday. June futures, which will be the main driver of open interest and market direction through most of the summer, led the complex higher with a $3.22 per cwt rally, sparking strong upward moves in all nearby contracts and posting triple-digit gains through the entire complex. April lean hogs closed $0.13 higher at $90.475, May lean hogs closed $2.78 higher at $98.775 and June lean hogs closed $3.23 higher at $107.70. Monday's hog slaughter is estimated at 367,000 head, 111,000 head less than a week ago and 122,000 head less than a year ago. Pork Cutouts totaled 219.05 loads with 193.79 loads of pork cuts and 25.26 loads of trim. Pork cutout values are up $0.09 at $99.04. The CME Lean Hog Index for April 1: down $0.40, $90.01.
TUESDAY'S HOG CALL: Steady. Despite strong futures gains, cash markets are expected to remain stable through the first half of the week as packers continue to work through the readily available hogs left by lower processing speeds over the past few days.
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