Monday Midday Livestock Market Summary - Firm Weakness Floods Through Complex Monday

GENERAL COMMENTS: 

Wide-ranging pressure is seen in the livestock markets, which continues to draw sellers back into the market. Triple-digit losses are seen in most cattle markets, which may further weaken any support later in the week. Corn prices are higher in light trade. March corn futures are 3 cents higher Monday. Stock markets are higher in light trade. The Dow Jones is 340 points higher while Nasdaq is up 62 points.

LIVE CATTLE:

Triple-`digit losses have developed across the live cattle complex. There is very limited support seen in the market at this point with very sluggish market movement developing in nearby trade. The focus on additional market shifts lower may start to impact the overall trade direction long term. Cash cattle activity remains quiet with very little market direction developing across the complex. Showlists are larger in Kansas, but steady to lower in other areas. Bids and asking prices are undeveloped and likely to remain that way until midweek. Boxed Beef cut-outs at midday are higher, $1.32 higher (select) and up $0.28 per cwt (choice) with light movement of 43 total loads reported (19 loads of choice cuts, 7 loads of select cuts, 9 loads of trimmings, 8 loads of ground beef).

FEEDER CATTLE:

Light pressure seen early in the session has expanded to triple-digit losses in most contracts. This may bring increased pressure to the entire complex as follow-through pressure is being fueled by weakness in all cattle trade as well as a weaker tone in the cattle on feed report.

LEAN HOGS:

Light to moderate pressure is developing across lean hog futures with overall lack of support seen across the entire complex. Even though initial pressure is focused on a market correction following the recent gains, the concern that prices could continue to erode lower, and take away most of the market support seen in the complex. Nearby losses are seen from 70 to 90 cents per cwt with narrow losses developing in deferred contracts. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.49 at $63.10 per cwt with the range from $56.00 to $63.36 on 3,197 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $0.90 at $61.70 per cwt with the range from $56.00 to $62.00 on 257 head reported sold. The National Pork Plant Report posted 161 loads selling with carcass values adding $0.64 per cwt. Lean hog index for 2/22 is at $69.78, down 0.39 with a projected two-day index of $69.32, down 0.46.

Scouring calves need fluids, fast

Scouring calves can go downhill quickly. Act fast to save a calf.

Calving time means the potential for scours. In fact, gut infections and the resulting diarrhea and electrolyte imbalances the scours produce is the leading cause of death in very young calves.

But proactive support can save calves. That means getting fluids into a scouring calf, fast. Most producers know how to use an esophageal feeder for giving fluids and some use a nasogastric tube.  These are quick and easy ways to get electrolyte fluids into the calf and a safe way to do it if you know how.

“If the calf still has a suckle reflex (able to suck on your finger) we can use the esophageal feeder,” says Geof Smith, with the College of Veterinary Medicine at North Carolina State University. A person just needs to be careful and slow when putting the probe down the throat, making sure it goes down the esophagus and not into the trachea (windpipe). 

Most problems occur when the probe is rammed down quickly. Because of the ball on the end, the probe is not supposed to be able to go into the trachea, but you should always check by palpating the neck. “Make sure you can feel two tubes; you should be able to feel the plastic tube separately from the trachea. Once you get the probe safely down the esophagus you can administer the electrolyte fluid,” Smith says.

Once the calf has been rehydrated, should you turn it back out with the cow? In years past, veterinarians recommended holding scouring calves off milk for 24 hours, simply feeding electrolyte solutions, but today that is no longer advised.

“The old philosophy was that milk would likely make the diarrhea worse, but more recent research refutes this,” says Derek Foster, professor of ruminant medicine, North Carolina State University College of Veterinary Medicine. “Milk helps the calf maintain strength and body weight while recovering. Calves held off milk tend to lose weight. We prefer to keep them on milk as long as they are up and able to nurse the cow.”

Monday Morning Livestock Market Update - Moderate Price Shifts Expected

GENERAL COMMENTS:

Early trade Monday is expected to start steady to weak with the overall pressure from last week likely to carry into the market. The Cattle on Feed report on Friday afternoon came in neutral to bearish following spot-on marketing levels, while both placements and total Cattle on Feed numbers were increased from early estimates. The main focus was on the bounce higher in placements, focusing on additional longer-term supply available to the market through the rest of the year. Cash cattle activity is likely to remain undeveloped with showlist distribution and inventory-taking the main order of business.

Strong support late last week is creating some uncertainty as traders have not started to adjust markets for end-of-month activity. This could add even more volatility to the market, although traders are now going to be closely following the ability to push market fundamentals higher in order to sustain the recent futures support. There will be even more emphasis on the direction in both cash hog and pork cutout values over the next couple of days. Early cash hog bids are expected to be steady to $1 lower Monday morning with most bids likely to be steady to weak. Daily procurement levels are targeted at 463,000 head Monday.

	BULL SIDE		BEAR SIDE
1)	Cattle marketed during the month of January is seen at 106%. This is spot on with early market expectations and continues to focus on the ability to aggressively move beef through early 2018.	1)	Aggressive moves higher in cattle placements in feedyards during the month of January is likely to limit long-term support in the feeder cattle futures.
2)	Despite the volatility in the cattle futures through last week, boxed beef values continue to show aggressive and firm market support. This is likely to help draw additional underlying support through the entire complex.	2)	Live cattle futures pulled back further once again Friday. Although most of the late-week activity was based on position taking, the overall lack of buyer support is expected to bring additional underlying concerns to the market as market volatility may be evident over the near future.
3)	Strong continued buyer support continues to develop through lean hog futures following the $4 market rally that started to develop last week. Additional upward market activity is likely through the end of the month.	3)	Continued pressure in cash hog values despite a strong market rally in the futures trade is likely to add limited support to the market as traders still are focusing on the inability to bring this support to underlying fundamental markets.
4)	Price stability and narrow gains have slowly developed in pork cutout values. This is likely to build even more momentum across the entire complex as traders look for increased underlying support in both futures and cash market trade during early March.	4)	The mixed trade on Friday is expected to bring a sense of market correction back into the market Monday morning. With traders focusing on the unchecked gains over the last few days, and end of the month adjustments still likely, additional market swings are likely Monday.

Friday Closing Livestock Market Summary - Mixed Trade at End of Week

GENERAL COMMENTS

From Friday to Friday, livestock futures scored the following changes: Feb LC off $2.10; Apr LC off $2.80; Mar FC off $3.72; May FC off $3.45; Apr LH up $3.22; May LH up $2.68. Cash cattle trade was light to moderate during the day with clean-up activity seen in all areas. Prices were generally steady with the previous week's trade as the tone of the market was set midweek. Live cattle trade held at $128 per cwt while dressed activity was seen from $204 to $206 per cwt, with most sales steady to $1 per cwt lower than the week previous. It is likely that active market trade will not develop until midweek or later next week, which could limit additional market direction. According to the closing report, the national hog base is $0.93 lower compared with the Prior Day settlement ($57.00-$63.75) weighted average $62.63. Corn futures were lower in light activity with March futures down 1/2 cent Friday. The Dow Jones Index is 347 points higher with the Nasdaq up 127 points.

LIVE CATTLE

Narrow trading ranges developed late in the day Friday following what turned into moderate-to-strong pressure through most of the session. Prices were contained to a narrowly mixed range as traders tried to adjust positions for the weekend ($0.22 higher to $0.52 lower). Narrow losses developed in nearby cattle trade, but late-day market shifts helped to bring light buyer activity back to the table. USDA reported Friday that Cattle on Feed totals as of Feb. 1 increased 0.5% over early market estimates. This is not expected to have a major impact on the market, as marketing levels in January were on target with expectations. The main focus will be on the increased placements in January, which will likely add to the weakness in the market next week. Beef cut-outs: mixed, $0.76 higher (select, $212.82) and down $0.03 (choice, $218.37) with light demand and offerings (25 loads of choice cuts, 15 loads of select cuts, 4 load of trimmings, 29 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady. Activity and interest in the cattle markets early next week will likely follow trade that developed through the middle of the week. Interest in the cash market is likely to be limited to showlist distribution and inventory taking most of Monday.

FEEDER CATTLE:

Mixed feeder cattle trade developed late Friday as traders tried to anticipate the January Cattle on Feed report. This left prices in a narrow trading range following early market shifts ($0.52 lower to $0.42 higher). Traders stepped into the market at the end of the week with the intention of trying to square positions and cover short positions before the weekend. But this only had limited success, as the overall tone of the market still remains weak, and sparked another round of selling through early trade. Total placements in January came in 3% over the early estimate and above all market ranges. This is likely to have a weakening effect on the market once markets open Monday. CME cash feeder index for 2/22 is $147.63, down $0.42.

LEAN HOGS:

Light trade was seen Friday as traders focused more on market corrections than any significant market shifts over the last couple of days. This left prices mixed in a narrow range (0.02 lower to 0.17 higher). Early market activity was offset by position-taking through the last half of the trading session with early losses quickly being eroded through the day. Even though gains remained narrow at closing bell, the focus on market firmness continues to be the main direction in the complex as traders look for increased activity early next week. Pork prices bounced higher on firm support in most primal cuts. All cuts except ham markets posted gains at the end of the week, allowing firm overall market support. Pork cut-out: $79.48 up $0.78. CME cash lean index for 2/21 $70.17, down $0.61. DTN Projected lean index for 2/22 $69.78, down $0.39.

MONDAY'S CASH HOG CALL:

Steady to $1 lower. Limited overall trade activity is expected to be seen over the next few days with traders still focusing on the weakening market range steady to $1 per cwt lower. Most bids are expected to remain steady early in the week with more focus on futures trade activity late in the month. Processing schedules are expected to be 462,000 head Monday.