Tuesday Morning Livestock Market Summary - Market Stability Expected

GENERAL COMMENTS:

Firm early-week gains in the futures complex sparked additional underlying support after strong price pressure in late March. Traders continue to focus on the ability to regain market momentum at current price levels, rekindling boxed beef values as traders look for stronger consumer demand in the next couple of weeks. The expectation is that cash market activity will be delayed until late in the week, even though packers are expected to return to the market generally short-bought. Traders seem to be focused on slow but steady growth over the next couple of weeks, which could reestablish price support in a sideways market trend for the next couple of months.

Stability developed Monday in lean hog trade, allowing traders to focus less on the wild market shifts last week, and more on the ability to bring active trade interest back into the complex in early April. Prices are expected to open mixed in a narrow-to-moderate trading range, staying within the current wide but sideways trading range, with focus likely on domestic demand ahead of the Easter holiday season. Traders are also likely to anticipate export announcements to China, which will be reported Thursday morning. The underlying focus on weekly sales to China sparked the overall wide market moves higher and lower the last few weeks, and could continue to spark widespread interest in the next few months. Cash hog values are likely steady to $1 per cwt higher with most bids firm Tuesday morning. Expected slaughter Monday is at 477,000 head.

	BULL SIDE		BEAR SIDE
1)	Firm underlying support in wholesale beef values early in the week is rekindling buying momentum in the entire beef complex during early April.	1)	April and June live cattle trade remains below the 40-day moving average. The pullback in prices late last week has created underlying technical pressure in the complex, potentially limiting buyer interest the near future.
2)	Cash traders are expecting packers to remain short-bought not only through the early part of April, but over the next several weeks, which should stimulate additional buyer interest for the rest of the spring.	2)	Limited follow-through buyer support at the end of the trading session Monday is creating concern that buyer depth remains narrow, and the potential to outlast a strong shift lower could cause any buyer support to crack under the pressure.
3)	More stable prices in early April may not only bring additional traders to the complex but could focus the attention on potential commercial and noncommercial growth for the rest of 2019.	3)	The most recent rally in lean hog trade was primarily based off one week of strong buying activity to China. If active sales to China do not develop in the next two weeks, additional firm market pressure is expected as traders give up hope of active trade in the near future.
4)	The next round of trade talks between the U.S. and China are expected to start later in the week as the Chinese delegation travels to the U.S. in the next few days. The hope that each meeting moves both sides closer to finalizing a deal is still sparking hope in all hog trade.	4)	Because of the overall lack of data and lack of accurate and reliable information about African swine fever in China,the true impact on the pork industry isunknown. This makes it nearly impossible to get an accurate understanding on what potential demand will be in the next few months.

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Monday Closing Livestock Market Summary - Late-Day Buying Stabilized Hog Trade

GENERAL COMMENTS: Limited activity developed at the end of the session Monday with traders seemingly making the break from the volatile price swings seen in March. With a new month on the books, traders appear to be focusing on market stability as they look for additional fundamental shifts over the next week or two. Corn futures are higher in light-to-moderate trade. May futures added 5 cents per bushel. Dow Jones Index is 303 points higher with Nasdaq up 91 points. Cash cattle interest is expected to remain undeveloped over the next couple of days with bids and showlists not likely to be active until Wednesday or later. Cash trade last week fell $2.62 per cwt from the previous week, allowing increased concern about future losses to develop. The stability in futures should firm asking prices once they develop. Showlists are generally larger with the main reduction in offerings seen in Colorado. National Daily Direct afternoon hog report is $0.25 higher with a weighted average of $75.19 per cwt. Full range of $68.00 to $77.00 per cwt on 5,578 head sold.

LIVE CATTLE: Moderate-to-active buying moved into live cattle futures ($0.25 to $0.85 higher). Traders quickly broke away from the volatility in the market during March, which posted wide, $4 per cwt swings, as traders shifted price levels back and forth in the extremely wide range. But the ability for buyers to quickly and firmly move into the complex without any significant technical or fundamental direction change helped bring stability to the complex. Early triple-digit gains in the complex eroded near closing bell, but the general firmness seen through the entire complex continues to draw attention to potential market support as traders look toward growing demand through the spring and summer months. Beef cut-outs: higher, $0.44 higher (select, $219.33) and up $0.80 (choice, $226.84) with moderate demand and light to moderate offerings, 85 loads (46 loads of choice cuts, 14 loads of select cuts, 8 load of trimmings, 17 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL: Steady. Activity in cash markets is expected to remain at a standstill early Tuesday morning. Bids and asking prices are not expected until near midweek with potential trade likely to be pushed to the last half of the week despite last week's early market developments.

FEEDER CATTLE: Strong early gains eroded through the end of the session based on limited volume Monday afternoon ($0.10 to $1.20 higher). Nearby contracts were limited to 10- to 45-cent gains at closing bell as aggressive early buying support which focused on recent grain losses and strong underlying live cattle trade backed away from the complex at closing bell. The ability to hold prices higher Monday continues to show overall market support, but traders seem unwilling to aggressively step back into the market given the recent market slide. CME cash feeder index for 3/29 is $142.42 up $0.68.

LEAN HOGS: Limited direction held prices mixed despite aggressive early losses ($1.30 lower to $0.42 higher). Following initial, triple-digit losses moving into the market, price stability seemed to be the main order of business across the complex. This allowed for increased stability in all lean hog futures with most contracts showing narrow market shifts with nearby contracts holding 32 cents lower to 42 cents higher. The focus on rebuilding market support based on previous fundamental gains could help stimulate additional buying through the rest of the week. Traders still remain concerned about the lack of news or details about trade talks with China. But the length of the process is starting to become normal, allowing some traders to look past rumors and trade hopes until something more concrete develops. Pork cutout values firmed during early April with strong, triple-digit gains in picnic, rib and belly primals. Pork cutout values added $0.82 per cwt, moving to $82.15 per cwt on 256 loads. CME cash lean index for 3/28 is $73.87, up $2.15. DTN Projected lean index for 3/29 $75.80, up $1.93.

TUESDAY'S CASH HOG CALL: Steady to $1 higher. Limited activity expected Tuesday with most bids steady as packers continue to line up procurement levels for the week. Most bids are expected steady. Tuesday slaughter is expected at 477,000 head.

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Monday Midday Livestock Market Summary - Cattle Prices Rebound

General Comments

Strong underlying support is moving into cattle trade with live cattle and feeder cattle trade holding gains at or near $1 per cwt in most contract months. Focus on upcoming demand is rekindling buyer interest in all contract months. Hog futures started sharply lower, but remain mixed in sluggish early month trade. Corn futures are higher in light trade. May corn futures are 4 cents higher. Stock markets are higher in light trade. Dow Jones is 252 points higher with Nasdaq up 74 points.

LIVE CATTLE:

Strong buyer activity has quickly moved into cattle trade with nearby live cattle futures holding gains of 90 cents to $1.30 per cwt Monday morning. Underlying support through the complex is based on expectations that firm demand will continue to develop in wholesale beef values and lower grain markets last week can stimulate additional buying activity through the entire complex. The ability to hold current price levels through the week, sustains short term support levels in nearby contract months. This may continue to allow prices to hover in a sideways pattern over the next several weeks. Cash cattle markets are quiet, which is expected on a Monday. Following light to moderate trade last week, the focus will be on the need for packers to fill orders in order to keep aggressive plant speeds going. Show list distribution and inventory taking is likely to be the limit of interest shown Monday. Boxed Beef cut-outs at midday are higher, $0.86 higher (select) and up $1.24 per cwt (choice) with light movement of 34 total loads reported (22 loads of choice cuts, 5 loads of select cuts, no loads of trimmings, 7 loads of ground beef).

FEEDER CATTLE:

Underlying support has steadily and slowly moved into feeder cattle trade Monday as traders adjust to the firmness in live cattle trade and expectations that additional buyer support will return during early April. Corn prices are moderately higher Monday, but the inability to show aggressive support following last week's losses, point to lower overall feed costs, which is helping to sustain additional buyer activity in feeder cattle. Triple-digit gains are seen in all but January 2020 contracts at midday, as the early-month buyer support may spark longer-term support through the entire complex.

LEAN HOGS:

Strong initial losses developing Monday morning appear to have exhausted most seller interest at this point, as markets have posted mixed trade through the rest of the Monday session. Even though the general tone of the market remains weak with prices mostly lower, the inability to actively liquidate positions on the first trading day of April sparked increased interest. The firmness in pork values is helping to solidify nearby contracts, while deferred trade still remains concerned about long-term trade deals. 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 firmed Monday morning despite limited volume returning in early month trade. Pork cutouts gained $0.50 per cwt at $81.86 per cwt with 113 loads traded. Lean hog index for 3/28 is $73.81 up $2.15, with a projected two-day index is unavailable at this time.

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Monday Morning Livestock Market Summary - Market Volatility is No April Fools' Joke

GENERAL COMMENTS:

Limited interest is likely to develop in cash cattle markets Monday as traders not only are moving into a new week, but also into a new month and quarter, so interest is expected to be limited to new showlist distribution and inventory taking. More focus will be placed on inventory taking this week with additional contract deliveries expected during the first two weeks of the month. Futures are mixed with traders looking for longer direction following the strong moves lower last week. Even though April contracts moved below support levels in the last couple of trading sessions, the focus is moving to June futures, which has a $6 to $7 per cwt discount to spot April futures. The focus on potential long-term beef demand growth is being clouded by strong pressure in futures markets the last couple of weeks.

Continued pressure through the last half of the week has sparked renewed questions about how strong the overall lean hog futures remains going into the second quarter of the year. There are underlying expectations that pork demand support and growing export demand to China will continue as trade negotiations with China continues. The lack of consistency of pork buying in the last three weeks, according to weekly export sales reports, seems to be pulling back from previous market optimism. If the hog market is going to live and die on the Thursday export numbers to China, the volatility may remain intense. Trying to make sense of China's buying patterns is hard, if not impossible. One only has to look at the grain sales in the last decade to understand that this is far from a simple and straight forward market. Cash hog values are likely to start the week and month of April steady to $1 per cwt higher with most bids firm on Monday morning. Expected slaughter Monday is at 477,000 head.

	BULL SIDE		BEAR SIDE
1)	Strong beef demand is expected to continue in the next two months as temperatures should move back to more normal patterns, sparking additional grilling activity, which increases overall beef demand.	1)	Cash market weakness last week is creating concerns that follow-through pressure may develop through the next couple of months, leading both sides to focus on short-term availability and long-term demand.
2)	Summer live cattle contracts are still holding well above 100-day moving averages, despite the pull back from early support in the month of March. This may help to spark some renewed buyer activity as traders focus on a market near oversold status levels.	2)	With April futures moving below short-term support at the end of last week, June and August futures are testing March support levels at this point. A moderate shift lower Monday morning would break through these support levels, potentially sparking additional market pressure during early April.
3)	Despite the strong two-day pullback in lean hog futures, the complex moves into the month of April near contracts highs, with long-term optimism based on expected global demand that needs to be met.	3)	Sharp triple-digit losses in all contracts sparked renewed concern of pulling back from recent market gains. This shift at the end of April may have been more positioning related than long-term direction but still creates growing uncertainty.
4)	Cash hog values continue to ratchet higher, sparking additional buying interest from packers who are searching for additional market-ready hogs to fill the aggressive plant capacity that has developed through the last several months.	4)	Pork values have quickly stabilized and broken away from strong gains the last two weeks. This is creating even more concerns that current inventory levels may have a hard time moving in the current market range. Additional pressure through the next week could quickly erode fundamental support, which has quickly and aggressively developed through the hog complex.

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