Friday Morning Livestock Market Summary - Firm Gains Expected Across Livestock Trade

GENERAL COMMENTS:

Follow-through buying is expected to develop early Friday morning although volume is likely to remain sluggish in the first minutes of trade. The strong underlying surge in the market on Thursday sparked technical support through live cattle and feeder cattle trade, which is expected to spark additional buying interest. Although beef values have been slow to react at this point, it is likely that additional fundamental support will return to the complex early next week based on strong underlying support. Cash cattle trade remains sluggish following light trade in the South on Wednesday. Asking prices are at $127 live and $208 and higher dressed, but are likely to remain firm based on futures market activity. Packer interest should improve throughout the day, although it could be late in the day before business gets done.

The rekindled support in the last few trading sessions in lean hog futures is being driven by underlying expectations that a trade deal with China is "close." The definition of how close is uncertain, although there are hopes that there will be more information released through the week surrounding the current trade talks taking place in Washington. President Trump stated Thursday that he expects a "monumental deal to be announced in the next few weeks." It seems the overall lean hog complex may not be that patient in waiting, but for now, aggressive buying is being driven by expectations that China will be in the market to buy pork to meet domestic needs. The continued focus on African swine fever is creating more demand for pork supplies and allowing traders to remain bullish. Expanded trading limits are available for the entire lean hog complex Friday, potentially expanding the trading range even further at the end of the week. Cash trade is expected steady to $1 per cwt higher Friday morning with most bids 50 cents higher. Expected slaughter Friday is at 469,000 head. Saturday runs are expected at 145,000 head.

	BULL SIDE		BEAR SIDE
1)	Triple-digit market rallies developed in all cattle trade through the tail end of the week. This is expected to spark additional underlying gains Friday with technical support sparking increased interest.	1)	Boxed beef values have been unable to show significant improvement this week as traders still remain cautious about the ability to move increased volume of beef at higher prices.
2)	June live cattle futures led the complex higher Thursday, moving well above $121 per cwt, and breaking away from support levels near $119 per cwt. This bullishness in price levels and overall volume moving into the cattle complex is likely to gain additional momentum through early April.	2)	Cash cattle trade may have already set the tone for the week with early trade seen $1 per cwt lower than last week. Although feeders are becoming more aggressive given the futures market rally, it is uncertain if packers will be willing to offer higher prices, and may settle with limited trade for the week.
3)	Limit gains Thursday has moved nearby lean hog futures to new contract highs. July and August futures have surged above $100 per cwt as traders anticipate strong fundamental support the rest of the year.	3)	Cash hog values have been slow to respond to the most recent support in futures trade. With April lean hog contracts showing only limited support, there seems to be a disconnect between current market prices and expected long-term direction.
4)	Sharp pork cutout gains flooded back into the market as primal cuts have quickly responded to recent support in the futures trade. This is expected to add additional support at the end of the week.	4)	Despite the current market rally, the lean hog futures continues to be driven by emotional trade. Any sense of turbulence in the trade talks with China may quickly derail the most recent round of price surges in all hog trade.

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Thursday Closing Livestock Market Summary - China Trade Expectations Continue

GENERAL COMMENTS:

Strong support flooded livestock trade as renewed focus on China trade sparked limit hog market gains. Technical support quickly developed in cattle markets, posting triple-digit gains in most contracts. Corn futures are higher in light to moderate trade. May futures added 2 1/2 cent per bushel. Dow Jones Index is 166 points higher with Nasdaq down 3 points. Cash cattle trade remained undeveloped Thursday as the light activity seen midweek limited interest due to higher futures trade. With triple-digit gains seen across live cattle futures, bids in the north of $124 live and $203 to $205 dressed gained little to no attention from feeders. Asking prices remain at $127 live and $208 and higher dressed. But if further futures gains develop Friday morning, it is expected that asking prices will too. National Daily Direct afternoon hog report is $1.15 higher with a weighted average of $76.37 per cwt. Full range of $67.00 to $78.50 per cwt on 8,486 head sold.

LIVE CATTLE: Sharp gains flooded live cattle trade due to active buying developing in feeder cattle trade ($1.10 to $2.57 higher). Strong underlying support moved back into live cattle trade, which sparked technical support in all nearby contracts. The ability to bring increased activity through the end of the week may help spark some buyer interest. This is expected to spark end of the week buyer activity through the rest of the complex. Beef cut-outs: mixed, $0.61 lower (select, $218.36) and up $0.60 (choice, $226.74) with light demand and light offerings, 106 loads (72 loads of choice cuts, 12 loads of select cuts, five load of trimmings, 17 loads of coarse grinds).

FRIDAY'S CASH CATTLE CALL: Steady to $1 lower. Bids are expected to redevelop early Friday with current bids not being taken seriously due to the sharply rising futures prices. It is expected that active trade will need to develop in the North, while additional interest is expected through the south before the end of the week.

FEEDER CATTLE: Active support developed Thursday, sparking widespread interest across the entire complex ($0.85 to $2.80 higher). Strong triple-digit shifts in feeder cattle erupted Thursday, allowing for increased underlying support to move back into the oversold market. The strong move higher in May futures pushed prices above $150 per cwt for the first time in nearly two weeks. The renewed support created a bullish technical shift through all cattle trade, sparking additional underlying interest and potentially sparking increased volume through the end of the week. CME cash feeder index for 4/3 is $142.88 up $0.44.

LEAN HOGS: Sharp gains flooded through lean hog trade Thursday, sparking continued expectations ($0.50 to $3.00 higher). Dpot month April contracts posted limited support based on sluggish cash market activity and open interest. Focus through the rest of the complex continues to point to hopes of a trade deal with China and the ability to move pork products into the country. New contract highs have developed with July and August futures surging above $100 per cwt. There is expectations that even though current demand is sluggish, things are hopeful for the rest of the year. Thanks to limit gains in June futures, the lean hog futures has expanded trading limits for Friday to $4.50 per cwt. Expanded trading limits in the hog complex has become a common occurrence over the last month, adding even more volatility to the entire market. Pork cutout prices followed futures higher with triple-digit gains. Pork cutout values added $1.96 per cwt, moving to $82.22 per cwt on 282 loads.CME cash lean index for 4/2 is $77.70, up $0.92. DTN Projected lean index for 4/3 $78.26, up $0.56.

FRIDAY'S CASH HOG CALL: $1 lower to $1 higher. Sharp gains in futures trade is being cautiously watched from the cash market perspective. Most bids are expected to be steady to firm early Friday morning, as packers continue to steadily procure needed daily market ready hogs. Friday slaughter is expected at 471,000 head. Saturday runs are expected at 145,000 head.

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Thursday Morning Livestock Market Summary - Continued Hog Buying Expected

GENERAL COMMENTS:

Cash cattle trade has started to develop midweek for the second week in a row. It is somewhat surprising that activity has moved so quickly to midweek from the traditional Friday trade. The recent pressure in cattle futures has created some underlying concern that additional widespread market losses may continue to develop. Limited trade developing in the South at $124 live basis, is generally $1 per cwt lower than last week. Northern dressed trade is extremely limited, but seen at $205 in Iowa. Additional trade is expected to develop, especially in the north, but it is too early to tell if the trading range has already been well established. Futures trade is expected mixed as recent market pressure opening the door for additional early month weakness as traders test short-term support levels. A move below these levels would likely spark additional liquidation, although initial trade is expected to remain mixed based on combined short covering and follow through weakness.

Continued aggressive buying is seen through the week with traders focusing most of the attention on China. The potential and expections that a trade deal with China is "getting close" has sparked active market gains over the last couple of days with no indication that buyers will back away any time soon. But at the same time, being "close" to having a deal finalized, can be a long ways from getting it finalized. The final touches seem to be the trickiest part, and typically have the most complicated issues to deal with. With trade talks taking place this week, the hope for speedy agreements continue. Also the continued focus on African swine fever is creating expectations that China buying needs will grow with or without a trade deal. Cash hog trade is expected steady to $1 per cwt higher as weaker pork values are being offset by futures market optimism. Expected slaughter Thursday is at 477,000 head. Saturday runs are expected at 145,000 head.

	BULL SIDE		BEAR SIDE
1)	Renewed buyer support moved into wholesale beef values Wednesday. This may be the market strength futures trade has been searching for as overall beef values have slipped lower over the past several days.	1)	Cash market weakness is once again starting to develop with light midweek trade seen in several areas. The steady early-month weakness in futures trade has left feeders unwilling to chance additional market losses through the end of the week.
2)	Extremely active open interest remains well rooted in live cattle futures, with open interest holding near 440,000 contracts through early April. This indicates that traders are not yet willing to liquidate positions at lower price levels.	2)	April live cattle futures continue to hover just above short-term support levels set in March. A move below $125.70 per cwt in the next couple of trading sessions could spark additional longer-term weakness.
3)	A trade deal with China is nearing completion with reports that the deal is 90% complete. This is sparking underlying buyer support through the week as traders look for positive pork sales to be a byproduct of any trade deal.	3)	Traders are looking for a strong sale to China to be reported in the weekly Export Sales Report. If active sales are not seen, market pressure could quickly develop, similar to last week's price pressure.
4)	Renewed buyer support in nearby lean hog trade is testing contract highs once again. A move above March highs may spark additional interest through the entire complex.	4)	Wholesale pork values continue to struggle to find market stability through early April. Despite aggressive futures buying activity, without support in meat values, buying interest will quickly falter.

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Wednesday Closing Livestock Market Summary - Hog Rally Continues

GENERAL COMMENTS: Lean hog May through December futures posted gains of $2 to $4.40 per cwt Wednesday on anticipation of a China trade deal. Cattle markets eroded as technical pressure combined with expected cash and wholesale beef weakness. Light cash cattle trade started to develop Wednesday in Texas and Kansas at $124 per cwt, generally $1 lower than last week. A few cattle are reported sold in Iowa at $205 per cwt, but the majority of Northern trade is still holding onto bids of $203 to $204 per cwt. Asking prices still remain near $127 and higher live and $207 to $208 dressed. Additional trade is likely to be seen in all areas through the rest of the week. The National Daily Direct afternoon hog report was $0.61 higher ($67-$78.50, weighted average $75.89) on 10,041 head sold. Corn futures were higher in light-to-moderate trade with May up 1 1/2 cents per bushel. The Dow Jones Index was 27 points higher with the Nasdaq up 41 points.

LIVE CATTLE: Traders continued to back away from previous support in live cattle trade Wednesday. Futures settled mixed, $0.65 lower to $0.25 higher. Though spring 2020 contracts posted narrow gains, nearby contracts were down. The June contract closed at $119 per cwt, just slightly above the support level set in early March. A move below this level has already developed in the April contract, and technical pressure is starting to redevelop in most other contracts. Traders are also focusing on weakness in cash and wholesale beef values, which may add to late-week softness in the futures trade. Beef cut-outs: higher, up $0.48 (select, $218.97) to up $0.41 (choice, $226.14) with light demand and light offerings of 141 loads (82 loads of choice cuts, 19 loads of select cuts, 5 load of trimmings, 36 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL: Steady to $1 lower. Bids and asking prices are expected to redevelop Thursday morning, but limited trade seen midweek could curb active support and spark additional market weakness through the end of the week.

FEEDER CATTLE: Feeder cattle closed $0.10 to $0.90 lower. The lack of support in the complex continues to bring sellers to the market as expected cash cattle and beef value weakness is adding even more uncertainty. Strong premiums in summer and fall contracts are adding even more momentum to the market softness. The August contract traded at a $10 per cwt premium to April. Firming corn prices also added to softness in the cattle complex, as higher feed prices will raise production costs. The CME cash feeder index for 4/1 is $142.44, up $0.06.

LEAN HOGS: Hog futures rallied again Wednesday on expectations for a trade deal with China. Futures closed $0.12 to $4.40 higher. Support swept through all nearby contracts -- except spot April -- as traders focus on the potential for strong buying to be seen in summer and fall contracts. Most of the gains over the last two weeks have been based on expectations that a trade deal with China is in the home stretch, with a break from the trade war thought to be extremely good for the pork industry. It is still uncertain what details will be in any trade agreement if and when it develops. But with African swine fever reducing Chinese pork production, all signs point to more U.S. pork moving to China, at least over the short term. Pork cutout prices tumbled lower with multiple primal cuts recording sharp price reductions. Pork cutout values fell $1.45 per cwt, moving to $80.26 per cwt on 287 loads. CME cash lean index for 3/30 is $76.78, up $0.98. DTN Projected lean index for 4/1: $77.70, up $0.92.

THURSDAY'S CASH HOG CALL: Steady. Light pressure is expected to redevelop Thursday morning despite recent futures support. Packers continue to focus on short-term direction in pork values, limiting cash support through the end of the week. Thursday slaughter is expected at 477,000 head. Saturday runs are expected at 145,000 head.

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