Tuesday Midday Livestock Market Summary - Hog Markets Rebound

General Comments

Moderate to strong gains have quickly moved into all livestock trade. Lean hog futures have posted strong triple-digit gains in nearby trade with traders quickly and aggressively reacting to Monday's lows. Cattle futures have continued to spark underlying support as new contract highs have helped spark additional technical support. Corn futures are lower in sluggish trade. March corn futures are 3 3/4 cents lower. Stock markets are lower in light trade. Dow Jones is 19 points lower with Nasdaq down 10 points.

LIVE CATTLE:

February live cattle trade has continued to develop, even though volume in the February contracts remains extremely light due to most traders already rolling out of the February contract, which is in the middle of the delivery period. April futures are holding firm gains, with a $0.57 gain through the morning as traders focus on continued fundamental support from beef values and expected cash trade. Nearby contracts have continued to set new contract highs, which is brining additional, but limited trade back into the complex. Cash cattle markets are at a standstill Tuesday, which is not surprising given the overall limited interest seen until the end of the week. A few asking prices are starting to develop at $130 and higher live and $206 and higher dressed. Bids may not be seen until midweek or later, likely pushing active trade to the end of the week once again. Boxed Beef cut-outs at midday are higher, $1.60 higher (select) and up $0.39 per cwt (choice) with light movement of 76 total loads reported (53 loads of choice cuts, 7 loads of select cuts, 6 loads of trimmings, 9 loads of ground beef).

FEEDER CATTLE:

Strong gains have continued to move into feeder cattle trade with traders moving the focus back to the lack of support in grain trade while continued gains develop in live cattle markets. Pressure in corn and soybean markets has rekindled the focus on lower production costs, which is expected to allow for additional buyer support for cash feeder cattle prices. Price levels in the Oklahoma City market Monday are seen steady to $3 per cwt higher than week-ago levels, helping to solidify additional underlying support in futures trade.

LEAN HOGS:

Strong triple-digit gains have improved through the morning with April futures holding a $1.97 per cwt rally. This support is focusing on regaining buyer support, which quickly evaporated Monday. The potential to spark underlying technical support once prices moved below $54 per cwt has sparked additional interest through the complex. Additional gains in pork cutout values has added to the underlying support in lean hog trade Tuesday, with traders looking for encouraging pork values to continue through the week. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.30 at $45.99 per cwt with the range from $43.00 to $46.65 on 6,121 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $0.19 at $45.47 per cwt with the range from $43.00 to $46.00 on 2,771 head reported sold. Pork carcass values bounced higher Monday morning following triple digit gains in most primal cuts. Pork cutouts added $1.04 per cwt at $61.96 per cwt with 218 loads traded. Lean hog index for 2/22 is $53.13, down $0.52, with a projected two-day index is $52.85, down $0.28.

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Colostrum key to calving season success

Calving time is always busy, so cow/calf producers should prepare in advance to help calves get off to a good start.

Calving time either has arrived or is approaching for many spring-calving beef producers, but not all calves will make it to weaning or marketing, Garrett Preedy, a beef nutritionist wrote in a recent post.

He said preweaning losses can often be traced back to birth, when calves did not receive adequate colostrum from their dams.

Colostrum is the first milk that the cow produces and is high in essential nutrients and antibodies. These antibodies, including immunoglobulin gamma (IgG), are especially important for newborn calves because antibodies do not pass directly from the mother to the fetus through the placenta in cattle like they do in other species (e.g., humans), Preedy said. This means that newborn calves are dependent on the passive transfer of antibodies through colostrum to help them build immunity to bacterial and viral infections.

According to Preedy, research has shown that calves who do not receive adequate amounts of colostrum at birth have increased morbidity and mortality rates before weaning. In addition, sick calves will have reduced weaning weights and other additional health and performance issues in the feedlot, he added.

The following factors can influence the calf’s ability to passively transfer the dam’s antibodies through colostrum consumption:

* Timing of colostrum intake. The timing of the calf’s colostrum ingestion is the most important factor to remember when calving, Preedy said. Not only does the newborn calf's small intestine allow for antibody absorption only within the first 24 hours of the calf’s life, but the efficiency of antibody absorption quickly declines within the first 12 hours, he explained.

Calves should receive adequate amounts of colostrum within the first six hours of life — preferably in the first two hours — for optimum immunity.

* Quality and quantity of the colostrum.Colostrum production is initiated around the last five weeks of gestation, and proper nutritional management is crucial to producing colostrum of a good quality and quantity, Preedy reported. Cows with a body condition score (BCS) of five and above are known to produce colostrum with higher levels of nutrients, including IgG, than cows with a BCS of less than five, he explained.

Proper protein intake will ensure the production of colostrum at an adequate volume and quality and with adequate antibody levels — and will also reduce the number of weak calves at birth, he said. Supplementing with vitamin E and selenium has also been shown to increase the concentration of IgG in cows deficient in selenium compared to non-supplemented cows.

In addition to proper nutrition, utilizing a vaccination strategy prior to calving can improve the antibody concentration in colostrum, Preedy said, suggesting that producers follow manufacturer labels on the timing and administration of pre-calving vaccines.

* Calves born to first-calf heifers. First-calf heifers are known to produce inferior colostrum compared to older cows, Preedy said, explaining that a heifer’s milk production is lowest during her first year, as is the volume of her initial production of colostrum. He added that first-calf heifers have not built up the number of antibodies that older cows have and do not have efficient antibody transport mechanisms.

Also, since the maternal instinct of first-calf heifers can be limited, Preedy said the timing of colostrum intake may be delayed because some heifers may not allow their calf to immediately nurse or may reject the calf altogether.

* Cow’s udder. The conformation of the udder and teats can inhibit a new calf’s ability to suckle colostrum for the first time, Preedy said. If the calf is unable to latch on and nurse due to the size or shape of the teats, the timing of the colostrum intake may be delayed.

Cows with quarters that do not produce milk, also known as blind quarters — usually caused by mastitis — will produce less colostrum, he added. Culling cows with poor udders will reduce the possibility of calves being unable to nurse quickly and efficiently.

* Dystocia and injury. Calves who go through difficult births, either assisted or unassisted, are at a higher risk of the passive transfer failing for several reasons, Preedy said. First, dystocia can be stressful for a calf and, as such, may increase the amount of time it takes for that calf to stand and nurse. Second, calves that experience a prolonged stage II of labor will often suffer from severe respiratory acidosis, resulting in less efficient absorption of IgG from colostrum. Third, injuries sustained during difficult births may prohibit calves from standing and nursing.

Producers should keep a close eye on calves that experienced a difficult birth and intervene, when needed, to ensure that those calves do consume colostrum, Preedy said.

* Weather conditions. Cold weather can affect the calf’s ability to obtain passive transfer, as calves that experience severe cold stress at birth are often slower to get up and nurse, meaning that many of these calves do not consume adequate colostrum in a timely manner, Preedy noted.

* Environment. Producers may not associate proper pen and pasture management with passive transfer, but it can play a major role, Preedy said. Muddy pen conditions can interfere with colostrum consumption by making it difficult for the calf to quickly stand and nurse as well as by covering the cow’s udder and inhibiting the calf from efficiently nursing.

If ingested, bacteria from mud and waste can colonize the villi in the calf's small intestine, reducing the absorption of key nutrients into the gut and potentially leading to scours outbreaks in calves, Preedy said.

Preedy concluded that calving time is always busy, so cow/calf producers should prepare in advance to help calves get off to a good start. Producers should maintain their equipment and facilities just in case intervention is necessary during a difficult birth, he said. They should also make sure to have unexpired colostrum replacement products on hand in case intervention is necessary or the calf is unable to obtain adequate colostrum from the cow.

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Tuesday Morning Livestock Market Update - Renewed Hog Market Pressure Develops

GENERAL COMMENTS:

Sluggish trade is expected early Tuesday morning following lackluster and directionless moves in all cattle trade Monday. Sharp early-week losses in corn, wheat and lean hog trade have diverted the focus away from fundamental and technical moves that may develop in the cattle complex, keeping prices hovering in a narrow range. The direction Tuesday is not expected to change as traders continue to focus on outside market direction while assessing end-of-month demand for beef. Cash markets are undeveloped with bids and asking prices still quiet. This is expected to continue through the next couple of days with active trade likely to be pushed off until late in the week.

Packers will attempt to get back to normal as many areas spent the weekend and part of the day Monday cleaning up from the latest round of snow and winter weather, yettransportation in some areas will still be a challenge, which will limit overall movement of hogs to plants. Cash bids are still expected steady to $1 per cwt lower with regional market situations likely to keep bids scattered through the range. Futures are expected to continue to move lower following concerns of pressure in cash markets and lack of stability in wholesale pork values. This may add even more uncertainty to the entire complex as traders could once again test last-week lows. Slaughter runs are expected at 475,000 head Tuesday.

	BULL SIDE		BEAR SIDE
1)	Strong early-week gains in boxed beef values has sparked increased underlying support through the entire beef complex.	1)	Severe winter weather and mounting snow amounts in many areas of Northern cattle country is limiting gains and cattle health through the last couple of months. This is expected to increase costs of gains of most cattle, also delaying finishing cattle by as much as weeks in some areas.
2)	Packers appear to remain short-bought going into the week. This would likely leave packers with limited cattle sourced through the first week in March, adding the potential for increased cash values as the week continues.	2)	The inability for packers to buy additional cattle on the cash market has created pressure to reduce overall plant runs. This may continue to reduce overall packer needs through the end of the month, avoiding higher cash market prices.
3)	Triple-digit gains developed in pork cutout values Monday,signaling that demand may be picking up as 2019 progresses.	3)	Volatile shifts in wholesale pork prices hascreated market uncertainty in the complex. The trend of variable wide up and down markets is eroding the confidence that primal cuts are gaining demand through the end of February.
4)	Hope continues to develop that any trade deal with China would secure significant short- and long-term pork purchases. This market momentum will likely randomly gain traders attention through the next couple of weeks.	4)	Sharp triple-digit losses have flooded through the entire lean hog complex Monday. This created additional concern that follow-through liquidation will develop as the week continues. This may push through recent support levels, setting contract lows before the end of the month.

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Monday Closing Livestock Market Summary - Hog Futures Under Pressure Again Monday

GENERAL COMMENTS: Livestock trade was limited Monday. Sharp triple-digit losses in early in nearby lean hog futures set a weaker tone, but hog futures were able to eventually move off morning lows as contracts fell $1 to $1.65 per cwt lower in nearby trade. Cattle futures were mixed in a narrow trading range, as corn and hog market pressure eroded firm morning buyer support. Cash cattle markets were quiet Monday afternoon following the sluggish market last week. Bids and asking prices are undeveloped. This is not unexpected at this point, as both sides are likely to be holding out for direction from futures trade and beef price changes. Showlists appear to be generally larger, which would be expected given the limited trade seen last week in cash markets. The National Daily Direct afternoon hog report was $0.49 lower ($43-$47, weighted average $46.41) on 4,815 head sold. Corn futures were lower in light activity with March down 4 3/4 cents per bushel. The Dow Jones Index was 105 points higher with Nasdaq up 41 points.

LIVE CATTLE: Firm buyer support quickly stepped into the live cattle market Monday morning following the higher cash cattle trade last week. However, the gains failed to hold, as traders pulled out of the market later in the day. Futures settled $0.12 lower to $0.35 higher. Traders are uncertain what the next round of Cold Storage and Cattle on Feed reports may hold, as last Friday's delayed reports gave little market direction. The strong pressure in the hog trade also pulled some traders away from the cattle complex as they tried to adjust to the market volatility in lean hog futures. Beef cut-outs: higher, up $2.22 (select, $214.57) to up $0.16 (choice, $219.55) with light demand and offerings, 83 loads (49 loads of choice cuts, 14 loads of select cuts, 4 load of trimmings, 16 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL: Steady. Limited cash trade developing last week has allowed for additional cattle to be carried over to this week. But, given the lackluster interest early in the week, it is expected that trade may not develop until the last half of the week again.

FEEDER CATTLE: Feeder cattle trade remained stuck in a narrowly mixed range following limited market direction Monday. Futures closed $0.40 lower to $0.35 higher. Firm pressure in corn trade sparked some support in spring and summer contract months. The April futures contract led the market higher with a 35-cent bounce on limited trader interest. The ability of live cattle futures to hold stable near contract highs is sparking some limited but firm interest in feeder cattle futures. CME cash feeder index for 2/22 is $140.42, up $0.89.

LEAN HOGS: Lean hog futures quickly came under pressure Monday, leading to concerns of further market pressure over the coming days. Futures closed $0.02 to $1.62 lower. The April contract temporarily broke through its support level of $62.97 per cwt set last week. The underlying concern is that growing hog supplies and sluggish demand will keep buyers on the sidelines. Prices moved more than $1 per cwt over session lows as seller interest became scarce at the lower levels, allowing markets to moderate a bit. This still leaves the complex in a challenging situation, with traders focusing on weak fundamental support as well as technical pressure. Pork cutout values firmed with strong gains in butt, ham and belly primal cuts. Pork cutout values added $1.91 per cwt, moving to $60.92 per cwt on 277 loads. CME cash lean index for 2/21 is $53.65, down $0.41. DTN Projected lean index for 2/22 $53.13, down $0.52.

TUESDAY'S CASH HOG CALL: Steady to $1.50 lower. The combination of strong futures market weakness as well as adverse weather conditions is expected to further erode cash hog markets Tuesday. Packers are trying to get back to a normal schedule following the weekend storm that disrupted production and hog movement. Most bids are expected to be steady to 50 cents lower as packers work through the backlog of hogs over the past few days. Tuesday slaughter is expected at 471,000 head.

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