Monday Midday Livestock Market Summary - Limited Pressure Holds Hog Prices Lower

General Comments

Light trade is seen through the entire complex with prices focusing on firm nearby lean hog market losses. Hog traders are adjusting positions following the $10-per-cwt rally seen over the last week. This is adding limited interest to the cattle market, as prices remain mixed midday. Corn futures are lower in light trade. May corn futures are 1 1/2 cents lower. Stock markets are lower in light trade. Dow Jones is 126 points lower with Nasdaq down 10 points.

LIVE CATTLE:

Initial early-morning pressure Monday has opened the door for additional buyer support to move into the complex. April futures are holding moderately 55-cent losses due to traders rolling positions to June and August contract months. The rest of the complex is steady to moderately higher as the focus has moved to building beef demand and the potential to spark additional underlying support through the entire complex. Narrow trading ranges are expected to be seen through the rest of the session Monday, allowing prices to hover in a narrow trading range, waiting for more long-term direction to develop later in the week. Cash cattle activity remains subdued following last week's light to moderate trade, which ended steady to $2 per cwt lower. Bids and asking prices are unavailable and likely not to be actively seen until midweek. Show list distribution and inventory taking are priorities through the morning in all areas. Boxed Beef cut-outs at midday are higher, $0.30 higher (select) and up $2.20 per cwt (choice) with light movement of 63 total loads reported (34 loads of choice cuts, 10 loads of select cuts, 5 loads of trimmings, 14 loads of ground beef).

FEEDER CATTLE:

Limited direction is seen through feeder cattle trade with traders backing away from pressure seen Friday as markets are mixed in a narrow range. Prices have wandered higher and lower through the entire morning with limited direction or trade interest moving into the market. Feeder cattle traders continue to closely focus on the mixed direction in live cattle trade as well as shifts in outside market direction, which may add increased overall uncertainty through the entire complex. The sharp rally seen in the middle of last week has continued to spark underlying support as traders are focusing on upcoming spring and summer demand.

LEAN HOGS:

Firm pressure has continued to develop through the morning Monday with May through July futures holding triple digit losses from $ to $1.50 per cwt lower. The focus through the complex has turned to position taking in lean hog trade, which has surged over $10 per cwt in nearby contracts last week. The unchecked upward momentum in the market was bound to cause a moderate market correction, although at this point, it is expected that losses will be limited due to long-term bullish market direction still relevant. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.11 at $74.67 per cwt with the range from $67.00 to $77.00, on 4,447 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price fell $1.78 at $74.88 per cwt with the range from $67.00 to $77.00, on 824 head reported sold. Pork values surged higher in morning buying following last week's futures support. Pork cutouts added $2.02 per cwt at $83.86 per cwt with 80 loads traded. Lean hog index for 4/4 is $78.53 up 0.27, with a projected two-day index is $78.68 up $0.15.

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Monday Morning Livestock Market Summary - Continued Buying Expected in Hog Futures

GENERAL COMMENTS:

Limited activity is expected early Monday morning in the entire cattle complex. Traders are expected to return to the futures complex following wild triple-digit moves in each direction last week. The underlying firmness will continue with traders focusing on potential long-term support in beef demand and the potential for longer term interest. But Friday's pullback, which pushed April futures $1.50 per cwt lower, was a quick reminder that the move higher will not likely be a smooth one. Most of the shift lower Friday was based on profit-taking in nearby contracts, while feeder cattle futures closed narrowly mixed in a narrow range. The underlying pressure Friday continues to add uncertainty, although a firming tone is expected early in the week, which could lead to additional longer-term support. Cash cattle trade is expected to remain subdued with inventory taking and showlist distribution the extent of the market activity in the entire complex.

Firm underlying buyer support is expected to redevelop through lean hog trade Monday morning. Volume is expected to be light as traders continue to focus on additional early-week developments, such as signs of a developing trade agreement and details of pork exports in the trade deal, but filling the China market with needed pork continues to create significant market support. News reports last week posted several analysts stating that pork prices should increase 20% or greater through the year based on China demand. Much of this may depend on a friendly trade agreement, which would eliminate the import tariff already on pork productsdue to the ongoing trade war. There is still uncertainty about what the long-term impact of African swine fever will be in China, and the worldwide price of pork, but the need to fill the market continues to spark optimism and price strength. Cash trade is expected steady to $1 per cwt higher Monday morning with most bids scattered through the range. Expected slaughter Monday is at 475,000 head.

	BULL SIDE		BEAR SIDE
1)	Total open interest in live cattle trade remains near record highs set in late March, with a total open interest nearing 450,000 contracts. This aggressive buyer interest in the live cattle contracts continues to spark optimism through the spring and summer months.	1)	Sharp triple-digit losses late last week in April and June contract months started out as position-taking, but the continued pressure has added caution to the entire complex.
2)	All active live cattle contracts continue to hold above the 40-day moving average price. This has continued to spark additional buyer interest through the entire complex during early April.	2)	Boxed beef values have continued to slowly erode through most of last week. This lack of seasonal support in the complex known as "grilling season" is creating some underlying concern that long-term market support may struggle through the next couple of months.
3)	July and August futures have continued to rally, moving well above $101 per cwt through early April, as long-term demand expectations continue to flood into the complex.	3)	Despite the strong rally in futures trade, wholesale pork product prices have become increasing inconsistent the last couple of weeks. The lack of steady follow-through support in pork primal cuts has caused increased caution through the market.
4)	New contract highs are seen in all contracts as traders remain bullish about expected domestic and export demand through the entire complex. This is likely to rekindle buying activity early Monday morning.	4)	There continues to be an extremely strong disconnect with short-term spot hog markets and long-term futures prices. The expectations of aggressive buyer support is not readily seen in cash prices or spot futures trade at this point, leading to some concern of potential volatility the next several weeks.

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Friday Closing Livestock Market Summary - Wide Price Swings in Livestock Trade

GENERAL COMMENTS:

Livestock futures shifted higher and lower through the session Friday as traders focused on end-of-the-week position-taking following previous gains. This may spark renewed buyer support Monday morning. From Friday to Friday, livestock futures scored the following changes: Apr LC up $0.35; Jun LC up $1.35; Apr FC up $0.90; May FC up $1.45; Apr LH up $1.65; May LH up $9.68. Light cash cattle trade developed through the North early afternoon Friday with prices mostly $126 per cwt live and $204 to $205 dressed. This is generally steady with last week's average. Some additional trade is likely to develop through the North the rest of Friday afternoon and evening, but the tone has likely been set with most late trade expected to be in the current market range. Activity is quiet in the South without any additional bids. This indicates that trade in the South is likely finished for the week following the trade seen Wednesday. The National Daily Direct afternoon hog report was $0.69 lower ($67-$78.50, weighted average of $75.79) on 6,819 head sold. Corn futures were lower in light-to-moderate trade with May down 2 3/4 cents per bushel. The Dow Jones Index was 19 points higher with Nasdaq up 40 points.

LIVE CATTLE: Live cattle futures were pressured Friday as traders took profits. Futures settled steady to $1.50 lower. Despite triple-digit losses in the nearby trade, the market is firming as traders have moved off of support levels set early in the week. The aggressive gains seen Thursday led to position-squaring ahead of the weekend. All contracts bounced off of morning lows as buyers stepped back into the complex at closing bell. The June contract rallied off of short-term lows of $119 per cwt, which is likely to spark additional trade early next week. Beef cut-outs: higher, up $1.92 (select, $220.28) to up $0.19 (choice, $226.93) with good demand and moderate offerings of 132 loads (59 loads of choice cuts, 22 loads of select cuts, 40 load of trimmings, 12 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL: Steady. Following the cash market trade that trickled in through the last half of the week, both sides are expected to reassess needs on Monday. Showlist distribution and inventory-taking will be the main items on the agenda, with bids and asking prices not likely until later in the week.

FEEDER CATTLE: Feeder cattle futures closed mixed ($0.47 lower to $0.32 higher) on end-of-the-week position-taking. While futures were under pressure through most of the session, buyers slowly but steadily moved back into the complex in the last hour of trade as traders squared positions following Thursday's market rally. Thursday's move changed the tone of the market, creating a market reversal in all feeder cattle trade. There is strong potential for follow-through support early next week as traders focus on potential short- and long-term demand. CME cash feeder index for 4/3 is $142.88, up $0.44.

LEAN HOGS: Late-day gains in lean hogs offset wide swings earlier in the day. Futures closed mixed, $0.55 lower to $2.17 higher. There continues to be an extremely wide gap between buyer support in the spot April contract and the June contract. April rallied $1.67 per cwt through the week, while June gained $10.47 per cwt. Even though the April contract remain lightly traded, this still has an influence on the cash markets and spot-market direction. Traders flooded into the hog complex on hopes of a trade deal with China. Expectations that African swine fever will continue to create a need for imported pork to China has traders stepping to summer contracts and beyond. The most aggressive support Friday developed in October and December contracts. This indicates that this interest is focusing on long term market direction. Pork cutout prices shifted slightly lower Friday on spot-market uncertainty. Pork cutout values fell $0.38 per cwt, moving to $81.84 per cwt on 217 loads. CME cash lean index for 4/3 is $78.26, up $0.56. DTN Projected lean index for 4/4 $78.53, up $0.27.

MONDAY'S CASH HOG CALL: $1 lower to $1 higher. Moderate cash market swings are expected early next week, based on the tension between spot trade and futures direction. Most bids are expected to be steady to 50 cents higher, although the underlying tone of the market is firming once again. Monday slaughter is expected at 475,000 head.

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Friday Midday Livestock Market Summary - Live Cattle Futures Tumble

General Comments

Active pressure quickly developed in cattle futures Friday morning with traders slowly adjusting from sharp Thursday gains. Most of the softness is based on end-of-week postion taking. Hog futures are mixed following early gains. Traders have backed away from the complex allowing profit taking to develop after the sharp rally higher over the last few days. Corn futures are lower in light trade. May corn futures are 3 cents lower. Stock markets are higher in light trade. Dow Jones is 11 points higher with Nasdaq up 38 points.

LIVE CATTLE:

Aggressive pressure quickly moved through nearby lean hog trade with triple-digit losses seen in April through October contracts. This is adding even more uncertainty to the complex, although the market is holding support levels seen Thursday, creating most of the Friday losses to be based on position taking. This may add even more volatility early next week, but the ability to bring additional long-term support to the market could advance most contracts over the next couple of weeks. Cash cattle bids are seen in the North at $203 to $205 per cwt through the morning as packers are expected to increase activity through the net couple of hours. Trade is likely to need to develop in the North, although at this point, southern trade may have cleared enough numbers early in the week for both sides to call it a week and hold out until next week. Asking prices remain at $127 to $128 live, and $208 and higher dressed. Boxed Beef cut-outs at midday are mixed, $1.38 higher (select) and up $0.01 per cwt (choice) with active movement of 94 total loads reported (38 loads of choice cuts, 15 loads of select cuts, 36 loads of trimmings, 5 loads of ground beef).

FEEDER CATTLE:

Strong losses are quickly moving into feeder cattle trade following triple-digit losses in live cattle markets. Given the aggressive gains Thursday, the expectation is that most of the pressure is based on position taking at the end of the week. Even with Friday's moderate to firm price pullback the tone remains firm given the aggressive market reversal earlier in the week.

LEAN HOGS:

Limited gains have redeveloped midday following back-and-forth trade through the entire lean hog complex. The underlying tone of the market remains extremely bullish, given the aggressive $10 per cwt rally over the last two weeks. Traders continue to focus on increased underlying support from a trade deal that is reported to be getting closer to reality. This is creating expectations that additional pork will steadily move to China through the end of the year. Cash prices are unreported due to confidentiality on the National Direct morning cash hog report. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork values continue to firm following recent futures trade gains. Pork cutouts added $0.92 per cwt at $82.98 per cwt with 122 loads traded. Lean hog index for 4/2 is $77.70 up 0.92, with a projected two-day index is $78.26 up $0.56.

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