Monday Morning Livestock Market Summary - Cash Support Fuels Expected Cattle Gains

GENERAL COMMENTS:

Cash cattle markets are expected to be quiet through the morning with packers and feeders assessing last week's higher trade. With prices moving to $128 live and $205 dressed, a $2 to $3 per cwt gain over the previous week, the expectations are strong going into the week. Showlist distribution and inventory should keep both sides busy through most of the day with bids and asking prices not expected to develop until midweek. Futures trade is expected to remain mixed as traders continue to focus on nearby price levels near long-term resistance levels, but the ability to move above these levels has been elusive so far. Light early trade is expected through the morning as traders test the potential to run markets higher once again early in the week based on recent cash and wholesale beef values.

Limited market changes are expected in cash hog values early in the week with Monday's bids starting out steady to $1 per cwt once again. Given the support at the end of February, most bids are expected to remain steady to weak, providing limited underlying support. Futures trade is expected mixed-to-moderately higher with traders focusing on the potential to further distance themselves from long-term support levels, thanks to late-week buying through the end of February. This is helping to solidify additional commercial interest and the ability to gain attention as traders hold April prices above $56 per cwt. Monday slaughter runs are expected at 470,000 head.

	BULL SIDE		BEAR SIDE
1)	Strong gains in cash cattle trade developed Friday. This is expected to increase expectations through the month of March.	1)	Intense cold weather conditions in much of cattle country are not only severely impacting feedlot conditions, but this late-winter blast is also in the middle of calving in many areas. This is likely to increase calf losses, which will have a long-term impact on the market.
2)	Strong triple-digit gains ended the week in beef cutout markets with Choice cuts moving above $220 per cwt as traders focus on underlying market support developing through the spring and summer months.	2)	The inability for April contracts to break through the $130 per cwt ceiling is causing significant caution through the entire complex, potentially indicating that the market has topped out, as traders look for a potential reversal.
3)	Firm underlying support in nearby lean hog futures late last week is helping to spark additional underlying buyer interest through the entire complex.	3)	Pork demand continues to remain a constant concern given the availability of hogs in the system and pork already in storage. This bearish underlying fundamental picture could limit buyer support in futures trade for an extended time.
4)	Pork cutout values posted strong triple-digit gains. This posts a consecutive market shift higher Thursday and Friday in the cutout report, potentially breaking away from the up and down market shift from the last couple of weeks.	4)	Cold and snowy conditions are likely to hinder weekly processing schedules as subzero temperatures with significant wind chills will limit the movement of hogs to plants, as well as drifting conditions in some areas, keeping transportation on rural roads a challenge.

#completecalfcare

Friday Closing Livestock Market Summary - Livestock Gains Erode Late

GENERAL COMMENTS: Strong early gains across livestock trade were short-lived as initial support failed to hold in limited volume, allowing end-of-the-week positioning to develop late Friday. The feeder cattle market was the most volatile with nearby futures posting triple-digit losses while the deferred January 2020 contract sustained a triple-digit gain. From Friday to Friday, livestock futures scored the following changes: Apr LC up $0.88; Jun LC up $0.95; Mar FC off $1.68; Apr FC off $0.25; Apr LH up $0.95; May LH up $0.45. Cash cattle trade was developing Friday with light-to-moderate dressed cattle trade taking place in Nebraska and Iowa late morning at $205 per cwt. This is generally $3 per cwt higher than last week. Afternoon trade started to develop in the live market in all areas with prices at $128 per cwt, $2 per cwt higher. Though additional activity is likely to develop through the afternoon, the trend of the market likely has been set. The National Daily Direct afternoon hog report was $0.33 higher ($42-$45.29, weighted average $45.01) on 3,515 head sold. Corn futures were higher in light activity with May up 2 cents per bushel. The Dow Jones Index was 105 points higher with the Nasdaq up 59 points.

LIVE CATTLE: Limited activity kept live cattle prices mixed ($0.30 lower to $0.37 higher) Friday afternoon despite strong initial gains. The April contract led the complex higher Friday morning, breaching its 2018 high of $130.10 per cwt. However, limited trade volume the rest of the session allowed the contract to erode, and it was unable to close above $130 per cwt. Traders continue to allow prices to hover near long-term highs, but the inability to secure additional buyer interest at these levels is eroding market support. The current support in cash trade and beef values suggests that additional runs will be seen next week. But unless traders are able to breach these levels in the near future, additional market liquidation is expected. Beef cut-outs: higher, up $1.52 (select, $216.79) to up $1.34 (choice, $221.29) with fairly good demand and light-to-moderate offerings, 75 loads (34 loads of choice cuts, 15 loads of select cuts, 8 load of trimmings, 19 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL: Steady. Following cash market direction developing Friday, early week interest is expected to remain sluggish with inventory-taking and showlist distribution the main focus Monday.

FEEDER CATTLE: Wide shifts in feeder cattle trade sparked increased market uncertainty Friday. Futures settled $1.65 lower to $1.30 higher. Movements in feeder cattle trade Friday caused general confusion, as spring and summer contracts quickly retreated following a $1.65-per-cwt loss in the spot March contract. The inability of live cattle to hold early gains caused late-day protection-taking in the event that this lack of support is signal of an aggressive turn in live cattle futures. Late-day gains in corn futures also caused concern in nearby trade, as this swift shift through the session may indicate further market shifts during March. Deferred feeder cattle futures were firm to sharply higher due to light volume and expected long-term support holding across the complex. CME cash feeder index for 2/28 is $139.23, down $0.71.

LEAN HOGS: Initial buyer support eroded Friday as traders returned to concerns about pork demand growth. Futures closed $0.37 lower to $0.52 higher. Strong support swept through lean hog trade Friday morning, pushing futures triple digits higher as traders focused on early month momentum and the potential for additional players moving back into the market through early March. But as the session continued, limited follow-through buyer interest developed, allowing deferred traders to search for underlying short-term support. Limited late-day buying held in April and May contracts, although the tone of the market remains focused on potential gains through the next couple of weeks. Despite known concerns of strong hog and pork supplies, there is still hope that potential China trade will spark renewed buying interest. Pork cutouts saw additional support, ending higher for the second consecutive day. Pork cutout values were up $1.43 per cwt to $61.92 per cwt on 216 loads. CME cash lean index for 2/27 is $52.64, down $0.18. DTN Projected lean index for 2/28 $52.13, down $0.51.

MONDAY'S CASH HOG CALL: Steady to $1 lower. Limited direction is expected Monday, although packers will continue to move into the market, gaining access to market-ready hogs. Limited weather disruptions are expected over the next few days, potentially allowing packers and shippers to stay on track. Monday slaughter is expected at 477,000 head.

#completecalfcare

Friday Midday Livestock Market Summary - Cattle Futures Give Back Early Gains

General Comments

Firm buyer interest quickly swept through livestock trade early Friday morning, although lack of volume quickly turned markets lower at midday. Live cattle trade is holding prices steady to 50 cents lower with traders unable to maintain gains above $130 per cwt. Mixed hog prices are focusing on underlying pressure in deferred contracts as traders adjust positions late Friday morning. Corn futures are lower in sluggish trade. May corn futures are 4 cents lower. Stock markets are higher in light trade. Dow Jones is 46 points higher with Nasdaq up 30 points.

LIVE CATTLE:

Initial support in live cattle trade has quickly evaporated late morning with April live cattle futures quickly backing away from session highs. Front-month futures have fallen more than $1 per cwt from initial morning gains with April contracts holding 50 cent losses, trading at $129.35 per cwt. Even though prices broke through resistance levels of $130.10, the inability to hold these price levels at closing bell would be viewed as generally bearish, potentially sparking additional market weakness through the next couple of weeks. Cash cattle is expected to trade at some point through the day, although sales may be delayed until later in the day. Bids are firming in some areas with live bids at $125 while dressed bids have improved to $204 to $205 per cwt. Asking prices remain at $130 and higher live and $206 to $208 dressed. Late morning reports indicate that a few cattle have started to trade at $205 dressed in parts of the north. This would be $3 per cwt higher than last week. Boxed Beef cut-outs at midday are higher, $1.42 higher (select) and up $1.02 per cwt (choice) with light movement of 40 total loads reported (21 loads of choice cuts, 6 loads of select cuts, 3 loads of trimmings, 10 loads of ground beef).

FEEDER CATTLE:

Gains are holding in feeder cattle trade with contracts posting 50 to 80 cent gains in limited to moderate activity levels Friday. The initial strong market rally seen during early hours of trade was limited due to very sluggish market activity and end-of-week positioning expected to develop.

LEAN HOGS:

Trade is confined to narrow to moderate market moves late Friday morning following the inability for active buyer support to hold during initial March trade. April contracts are still hanging onto moderate 40 cent gains, although the shift from initial triple­-digit gains seemed to quickly dash any expectations and hopes of an aggressive end-of-week market rally. Traders are slowly focusing on potential short- and long-term market shifts, although late-day trade is expected to remain extremely sluggish. Cash prices are unreported at this time on the National Direct morning cash hog report. Cash prices are unreported at this time on the Iowa/Minnesota Direct morning cash hog report. Pork carcass values moved higher once again in limited volume based on firming underlying market support. Pork cutouts rallied $1.79 per cwt at $62.28 per cwt with 115 loads traded. Lean hog index for 2/27 is $52.64, down $0.18, with a projected two-day index is $52.13, down $0.51.

#completecalfcare

Friday Morning Livestock Market Summary - Limited Direction in Early March

GENERAL COMMENTS:

Cash cattle market inactivity has reached the home straight for yet another week with the potential for late-day Friday trade once again almost assumed. Although asking prices and bids have been available the last couple of days, neither side is willing to budge from current positions. At this point, all sides hope that more activity develops than last week and that it takes place before dark. Traders are looking for new life in the market following the first of March, allowing for the potential for increased market movement following lackluster futures shifts the last two sessions. The strong pullback in feeder cattle trade has created some nervousness through the entire cattle market, making some wonder if a move above long-term resistance levels is possible in the near future. Limited trade is expected early in the session, leading to mixed market shifts.

Lean hog futures are well on their wayto developing boundaries for a longer-term market range. April futures ended the month of February at $55.87 per cwt after trading within a $10 per cwt trading range through the month. This range appears to be the bookendsthat could contain the lean hog complex in the near future. Continued concerns surrounding aggressive hog production and market-ready pigs heading to packing plants is countered by expected long-term support and an oversold market structure. Limited activity is expected through the end of the week with most traders likely observing initial market direction through early March. Cash hog values are expected to continue to remain under pressure. This will likely lead to steady to $1 per cwt lower bids, although most bids are expected steady to weak. Friday slaughter runs are expected at 470,000 head, with 194,000 expected Saturday.

	BULL SIDE		BEAR SIDE
1)	April futures continue to remain within striking distance of long-term resistance levels of $130.10 per cwt set in February 2018. A move higher at the end of the week could spark renewed market interest.	1)	Sharp losses in feeder cattle trade has caused growing uncertainty in all cattle trade. With live cattle prices unable to move above the $130 per cwt price level, some are left to wonder if the top has been set.
2)	Beef values have shifted higher at the end of the month following continued active support in futures trade and expected follow-through interest in cash trade at the end of the week.	2)	Limited interest in cash cattle business through the week despite packers remaining short bought, is causing concern that packers may hold out once again, forcing more market-ready cattle to their disposal during early March.
3)	Spot April lean hog futures are holding nearly $3 per cwt above support levels and contract highs. This has allowed some needed breathing room for buyers to slowly step back into the complex.	3)	Wholesale pork values have wandered in a wild market shift, nearly daily bouncing back and forth from firm losses to active gains. The lack of consistency in pork primals is adding market uncertainty.
4)	Strong pork price firmness developed Thursday, helping to solidify expectations that additional fundamental support may develop through early March.	4)	Continued uncertainty surrounding trade agreements with China and lack of word on what this may mean for pork is allowing previous hopes to wilt slightly, as lean hog prices hover along in the bottom end of the trading range.

#completecalfcare