Wednesday Midday Livestock Market Summary - Hog Futures Struggle

General Comments

Hog futures continue to lead the complex lower despite gains in spot-month trade. This has further eroded live cattle trade due to limited market direction through the entire complex. Corn futures are lower in sluggish trade. May corn futures are 4 cents lower. Stock markets are lower in light trade. Dow Jones is 203 points lower with Nasdaq up 42 points.

LIVE CATTLE:

Firm pressure has moved back into live cattle trade. April futures have posted a 42-cent loss, falling to $126.46 through the morning. This has fallen below short-term support levels seen in early March, and could signal additional liquidation as traders continue to ratchet prices lower through the end of the month. The inability to show consistent support in beef values is adding to the overall pressure in all contracts, which are trading 30 to 80 cents lower in limited activity. Cash-markets trade shocked the market with light to moderate trade developing across the South. Live trade is seen at $126 per cwt, and was a surprise given that both sides seemed to be resigned to waiting until Friday before active trade developed over the past several weeks. This trade is generally $2 per cwt lower than last week. It is uncertain how many more bids will be seen at these levels, given the eagerness for feedlot managers to sell. This could leave more volatility through the end of the week. Bids of $205 are seen in the North, but these prices are still well below $210 asking prices. Boxed Beef cut-outs at midday are mixed, $1.72 higher (select) and down $0.70 per cwt (choice) with light movement of 85 total loads reported (53 loads of choice cuts, 7 loads of select cuts, 5 loads of trimmings, 20 loads of ground beef).

FEEDER CATTLE:

Limited activity continues to develop through the feeder cattle complex following moderate price swings during morning activity. The underlying pressure in most outside markets and softness in live cattle trade is maintaining a generally weak hold on the entire complex. But summer contracts are starting to break away from this market pressure with narrow gains in May and August futures based on firm losses in grain trade, which lowers production costs. Direction is expected to remain limited through the entire complex allowing for increased uncertainty through the entire market.

LEAN HOGS:

Strong triple-digit losses have moved through summer contracts despite the ability for spot April contracts to sustain firm midday gains. Support in spot prices are focusing on the strength in cash markets through the week. The downturn in the market is not expected to create significant market pressure at this point, as traders focus on the potential for profit taking following the extended market surge over the last couple of weeks. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $0.14 at $73.19 per cwt with the range from $64.00 to $77.50, on 5,118 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $0.24 at $73.72 per cwt with the range from $64.00 to $77.50, on 2,244 head reported sold. Pork values continue to firm but are showing more stability in primal markets. Pork cutouts gained $0.98 per cwt at $82.05 per cwt with 181 loads traded. Lean hog index for 3/25 is $67.13, up $2.16, with a projected two-day index is $69.50, up $2.37.

#completecalfcare

Wednesday Morning Livestock Market Update - Trade Focused on Growing Pork Demand

GENERAL COMMENTS:

Limited futures activity is expected in live cattle and feeder cattle trade this week with early-week lossesand short-covering opportunities unlikely in most of the complex. Live cattle futures pulled back nearly $3 per cwt from last week's highs, so it is uncertain if the wide trading range will be sustained, leaving the market in sideways pattern, or if March lows will be tested through the end of the month. More stories are surfacing about the number of cattle lost in the flooding and severe winter blizzards, butisn't creating a significant overall market impact yet. Even though these losses have a dramatic impact on local and regional areas and are devastating to producers, the fact that losses are not widespread is likely to minimize the overall impact on futures trade. Cash cattle markets remain undeveloped, although a few token packer bids may start to surface on Wednesday. It is likely that trade will be delayed until sometime Thursday or Friday.

Mixed trade is expected to once again develop with underlying firmness in the lean hog trade based on long-term demand and export expectations. Even though little new news is available, traders remain hopeful and optimistic that trade talks with China will bring about not only results, but more specific information about what an overall trade agreement will look like when it comes to moving U.S. pork to China. This can also be a double-edged sword, as recent emotional support has built this relationship up and helped to move prices where they are currently, so anything but stellar news could eventually limit follow-through support. Cash hog values are expected to redevelop steady to $2 per cwt higher with most bids $1 per cwt higher Wednesday morning. Expected slaughter Wednesday is at 477,000 head. Saturday runs are expected at 146,000 head.

	BULL SIDE		BEAR SIDE
1)	Underlying beef demand continues to firm as traders focus on the upcoming spring and summer "grilling season." Given the long, cold winter in many areas, any sense of warmer weather may spark increased overall consumer interest in the next couple of weeks.	1)	The inability to hold last week's market highs in live cattle and feeder cattle trade is causing concern that the $130 price level, which has held for over a year, may be unattainable at this point, and prices may continue to hover between the $120 and $130 per cwt levels long term.
2)	Beef values have continued to firm once again following mixed market movements last week. The focus on increased movement and domestic demand support is likely to help support trade through the end of the month.	2)	Feeder cattle futures have fallen nearly $3 per cwt in the last couple of trading sessions, as concerns of increased available cattle moving into feedyards through the spring and summer is derailing previous market support.
3)	Strong futures support in spot April futures has sparked increased overall buyer interest, moving prices to new contract highs, and opening the door for price levels above $80 per cwt in the April market.	3)	Firm pressure through the week in summer lean hog contracts has limited overall support concerning China trade deals. The fact that support was limited in May through October trade is pointing to uncertainty at current market levels.
4)	Firm support in cash and wholesale pork values will continue with further sales activity to China.	4)	The looming threat that African swine fever may continue to spread to North America continues to keep the entire complex on edge. This would quickly shift the focus away from providing pork for other countries, and significantly affect production levels domestically.

#completeherdhealth

Tuesday Closing Livestock Market Summary - Cattle Futures Continue to Move Lower

GENERAL COMMENTS: Moderate-to-firm pressure quickly developed throughout the livestock trade, although select contracts managed to move higher. Deferred feeder cattle contracts posted triple-digit losses following increased pressure in live cattle trade. Cash cattle markets remained at a complete standstill with no sign of asking prices or bids at this point in the week. Limited interest is expected to be seen over the next couple of days, but this may keep traders from making deals until sometime Friday. The National Daily Direct afternoon hog report was unreported due to packer submission issues at this time. Corn futures were higher in light activity with May up 2 1/2 cents per bushel. The Dow Jones Index was 140 points higher with the Nasdaq up 53 points.

LIVE CATTLE: Light pressure eroded buyer interest as traders tested recent market lows. Futures closed $0.12 to $0.77 lower. Limited direction developed Tuesday as traders tired to find a sense of support. Beef demand is expected to continue to firm through the summer, but with traders backing away from nearby highs, the sense of market support has disappeared. Nearby contracts traded 40 to 70 cents per cwt lower Tuesday, with more direction placed on outside market shifts as well as upcoming cash trade. Beef cutouts were not available due to reporting issues.

WEDNESDAY'S CASH CATTLE CALL: Steady. Asking prices and bids are yet to develop for the week. Although this is not unexpected for a Tuesday, it will likely delay any significant activity until late in the week.

FEEDER CATTLE: Weakness developed in feeder cattle trade late Tuesday as live cattle futures slid lower. Feeder cattle futures settled mixed, $1.35 lower to $0.57 higher. Limited buyer interest slowly moved through nearby feeder cattle futures with lightly traded March holding a 57-cent gain. Limited buying early in the session kept deferred contracts under pressure. Summer and fall contracts posted triple-digit losses based on potential late placements in feed yards. CME cash feeder index for 3/251 is $142.04, up $0.24.

LEAN HOGS: The spot-month lean hog contract found support on potential export demand, but support was inconsistent through the rest of the complex. Futures closed mixed, $0.22 lower to $1.07 higher. Spot-month April closed at $79.72 per cwt following a strong $1.07-per-cwt rally. Rumors that China would actively buy U.S. pork through the rest of the year sparked support throughout the lean hog trade early Tuesday. But May through October futures faltered through the day as traders were not able to sustain market interest. Even though most summer contracts were stable, the ability to hold prices at or near contract highs continues to spark renewed interest through the entire complex. Pork cutout values are unreported at this time due to reporting issues. CME cash lean index for 3/22 is $64.97, up $2.56. DTN Projected lean index for 3/25: $67.13, up $2.16.

WEDNESDAY'S CASH HOG CALL: Steady to $2 higher. Continued cash market support is expected to redevelop midweek, although the lack of aggressive futures trade may curb the intensity of cash buying activity over the next couple of days. Wednesday slaughter is expected at 477,000 head. Saturday runs are expected at 146,000 head.

#completecalfcare

Tuesday Midday Livestock Market Summary - Mixed Price Shifts Leave Markets Unsettled

General Comments

Mixed trade has developed across livestock trade with April lean hog trade pushing $1 per cwt higher in limited activity. The hope and expectation that any trade deal with China would spark aggressive buyer support is helping to limit pressure in the complex. Corn futures are higher in sluggish trade. May corn futures are 1 3/4 cent lower. Stock markets are higher in light trade. Dow Jones is 86 points higher with Nasdaq up 42 points.

LIVE CATTLE:

Follow-through pressure quickly moved through the entire complex with nearby contracts steady to 20 cents lower with more aggressive pressure developing through fall contract months. The concern that the recent announcement of increased cattle on feed will not only skew the overall supply level of beef through the rest of the year. But the growing concern is if this trend of larger placements will continue through the rest of the year, and further erode overall buyer activity through the complex. Cash markets are undeveloped with bids and asking prices still unavailable. This is not surprising, as bids are not likely to be seen until late in the day or potentially Wednesday. Most trade will likely be pushed off to the second half of the week, and potentially Friday. Boxed Beef cut-outs at midday are higher, $0.54 higher (select) and up $0.69 per cwt (choice) with light movement of 64 total loads reported (41 loads of choice cuts, 9 loads of select cuts, 5 loads of trimmings, 9 loads of ground beef).

FEEDER CATTLE:

Mixed feeder cattle trade has developed with the complex a mixture of nearby verses deferred trade direction through the morning. This is holding March and April prices 15 to 67 cents per cwt higher, while all other trade is under pressure, falling 50 cents per cwt based on pressure in live cattle trade. The underlying pressure seen Monday has slowed significantly as traders try to establish more stable market shifts due to emotions being held in check. This could add some additional moderate swings through the near future, although traders seem to look back to fundamental support through the end of the month before aggressively moving back to the complex.

LEAN HOGS:

Strong underlying support moved back into the lean hog complex with April futures sparking renewed gains with a $1 per cwt developing following a morning filled with narrowly mixed price shifts. This may continue to spark some underlying gains based on the expectation that domestic and export demand will continue to solidify through the next several of months. But there is little if any official indication that continued sales to China will keep stimulating the market. But for the most part, there seems to be a strong expectation from all parties that this demand growth to China will help to solidify buyer activity. 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 values continue to firm as steady to active buying is moving through the complex. Pork cutouts gained $1.10 per cwt at $81.30 per cwt with 243 loads traded. Lean hog index for 3/22 is $64.97, up $2.56, with a projected two-day index is $67.13, up $2.16.

#completeherdhealth