Wednesday Closing Livestock Market Summary - Support Continues into noon hour

General Comments

On Tuesday at this time the board was trading mostly mixed and right after the noon hour the complex crumbled and closed lower. Wednesday's board could easily end up doing the same with the sheer amount of volatility and uncertainty that looms throughout the market, but for the meantime both lean hogs and feeder cattle are trading fully higher and the live cattle contracts are mixed with cash trade beginning to emerge. March corn is down 1 cent per bushel and May soybean meal is up $4.50. The Dow Jones Industrial Average is up 110.81 points and NASDAQ is up 59.92 points.

LIVE CATTLE

As the live cattle contracts reach the noon hour, nearby contracts are mostly lower while deferred contracts are mildly higher. April live cattle are down $0.27 at $112.67, June live cattle are down $0.25 at $105.55 and August live cattle are up $0.05 at $105.45. Following Tuesday's light to moderate trade throughout most of the country, a few bids are sitting on the table at noon, but trade hasn't really developed. Bids of $184 to $187 have been renewed by a major in Eastern Nebraska for delivery next week.

The Fed Cattle Exchange Auction reported a total of 755 head, of which 627 head sold earlier Wednesday morning. There was a total of five lots, one in Texas and four in Kansas. Only one lot in Kansas did not sell. All started with $115 asking prices and those that sold went for $115.25, most lots were set for one-to-nine-day delivery, and one lot in Kansas is set for one-to-seventeen day delivery.

Boxed beef prices are lower: choice down $1.15 ($206.32) and select down $0.88 ($199.02) with a movement of 103 loads (73.25 loads of choice, 17.15 loads of select, 5.71 loads of trim and 7.37 loads of ground beef).

FEEDER CATTLE

Feeder cattle contracts are making a strong move into the noon hour as nearby contracts push advancements higher and higher. March feeders are up $1.32 at $134.30, April feeders are up $1.32 at $135.45 and May feeders re up $0.77 at $136.60. Cash cattle trade is most likely going to develop for lower prices again this week which could hinder the feeder cattle market's push for higher prices throughout the later part of the week.

LEAN HOGS

The projected two-day lean hog index is not available at this time. The lean hog market isn't out of the clear from the coronavirus scare but a healthy cash market has its way of supporting the future's market beautifully. Thankfully cash prices were higher again Wednesday morning and the future's market has been able to capture gains of $0.57 to $0.92 higher. April lean hogs are up $0.57 at $65.25, June lean hogs are up $0.92 at $80.62 and July lean hogs are $0.87 at $81.67.

Hog prices are higher on the National Direct Morning Hog Report, up $0.35 with a weighted average of $49.95, ranging from $45.00 to $51.00 on 5,051 head sold and five-day rolling average of $50.02. Pork cutout total 191.36 loads with 167.42 loads of pork cuts and 23.93 loads of trim. Pork cutout values: down $1.27, $64.70.

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Wednesday Morning Livestock Market Summary - Additional Technical Losses Possible Through Cattle Trade

GENERAL COMMENTS:

Aggressive follow-through liquidation late Tuesday in live cattle futures sparked the development of light cash cattle trade. The eroding market structure gave the opportunity for packers to sweep in with lower bids. The recent tumble in futures trade caused fear in many feedlot managers, and prices later in the week could see additional sharp losses. Although it is expected that some additional trade will likely be done before the end of the week, prices fell to $187 dressed in the North, a $3 per cwt loss from last week's average. Sales in the South developed $5 per cwt lower at $115 per cwt. Unless a major correction is seen in live cattle futures the next couple of days, these price levels are likely to set the tone for weekly cash cattle prices. Futures trade is expected mixed during early trade. Although a strong underlying weak tone remains evident, aggressive selling across the live cattle complex has broken through short-term support levels and will likely attract moderate buyer support in order to cover short positions. Outside market direction is expected to play a significant role in the direction and activity level in cattle trade Wednesday, as the late day tumble in stock markets Tuesday pulled cattle markets away from the mixed price moves early in the session. Similar patterns are likely in midweek trade with buyers likely to stick their toes in the water, looking for an opportunity to buy at these levels. But if widespread liquidation continues in outside markets, any early market support could quickly erode. Continued global concerns of the spread of coronavirus continues to leave markets weak even though the market remains in an oversold status. Wednesday slaughter is expected near 121,000 head.

The lean hog futures complex still remains generally weak but is fairing the widespread market liquidation much better than most other markets over the past couple of days. The main reason for this is that because so much focus in the lean hog and pork markets has been squarely focused on China and the potential or lost potential demand growth in the country, traders feel that a "coronavirus correction" in other markets was already evident in lean hog trade during January. This does not mean that additional strong losses may develop in lean hog futures, especially as the fear and concern of the virus spreads to the U.S. But it is helping to break the weaker cycle in the entire livestock complex, at least for now. The underlying weakness in the complex is still expected midweek, but prices are likely to remain mixed during morning trade. Cash hog prices are called $1 lower to $1 higher with most bids expected steady. Slaughter Wednesday is expected at 495,000 head. Saturday runs are expected at 90,000 head.

	BULL SIDE		BEAR SIDE
1)	An oversold market structure remains in live cattle and feeder cattle trade. This would likely create light-to-moderate price support in the near future if outside markets start to stabilize.	1)	Widespread technical liquidation through cattle trade the last two days has eroded all recent support in the market. Live cattle trade is now focusing on maintaining support levels last seen last September. This could limit additional buying through the end of the month.
2)	The majority of beef production in the U.S. is dependent on domestic demand. This will help to insulate the beef market from a portion of the global economic challenges that is causing so much fear in all markets through the week.	2)	The announcement by CDC Tuesday that coronavirus in the U.S is no longer a question of whether a pandemic will happen, but when, continues to add to the urgency of the virus, and the local impact it may have on domestic beef demand and the economy.
3)	Lean hog futures continue to test support levels following mixed price moves within a narrow range Tuesday. The ability to spark additional technical buyer support midweek could quickly push prices moderately higher through the end of the month.	3)	The lack of support in the stock market created widespread concerns not only for meat markets but all consumable products. The Dow Jones closed down another 800 points Tuesday, making the two day market slide near 2,000 points lower.
4)	Strong gains redeveloped in cash hog prices Tuesday, helping to continue the focus on packers trying to fill needed plant space as they search for market-ready hogs through the end of February.	4)	Pork values eroded following the continued underlying pressure through the complex. The weekly market wide pressure has also taken most of the emphasis off of potential February sales of pork to China, which was expected to be closely watched this week.

#completecalfcare

Tuesday Closing Livestock Market Summary - Lower Tones Creep Into the Cash Market

GENERAL COMMENTS:

Another day and more position lost in the livestock complex as contracts are yet again painfully struck by the worry and uncertainty of the coronavirus. Hog prices closed higher again on the National Direct Afternoon Hog Report, up $0.89 with a weighted average of $49.60. March corn is up 1/4 cent per bushel and May soybean meal is up $1.00. The Dow Jones Industrial Average is down 879.44 points and NASDAQ is down 255.67 points.

LIVE CATTLE:

Tumbling yet again, the live cattle market closes fully lower. April live cattle are down $2.30 at $112.95, June live cattle are down $1.57 at $105.80 and August live cattle are down $1.32 at $105.40. The slim support that the market had dabbled in at the noon hour Tuesday is long gone as traders are set in a quick-fire sell all/sell everything mindset. The worry of the coronavirus has now trickled into the cash market as light trade developed in parts of both the North and the South Tuesday afternoon. Northern dressed trade was at mostly $187, roughly $3 lower than last week's weighted average basis Nebraska. Southern live cattle trade was at $115, generally $5 lower than the prior week's weighted averages.

Boxed beef prices closed mixed: choice up $0.40 ($207.47) and select down $2.47 ($199.90) with a movement of 141 loads (61.59 loads of choice, 37.10 loads of select, 0 loads of trim and 41.82 loads of ground beef). Tuesday's slaughter is estimated at 124,000 head, 1,000 head more than a week ago and 6,000 head more than a year ago.

WEDNESDAY'S CASH CATTLE CALL: Lower. Given the vast disruption from the futures market and the consensus that the cash market will trade lower this week, there's little hope of cash prices being anything but $3.00 to $5.00 lower. However, the one bullish piece of silver lining that remains true is that packers are still aggressively harvesting cattle. They haven't feared away, closed the plants and drastically minimized kills. Packers most obviously hold the upper hand in the market right now, but given this time of uncertainty, at least plants are still processing cattle, which means that they will need to keep buying cattle.

FEEDER CATTLE:

The little support that was testing the feeder cattle market around the noon hour has long disappeared, and contracts closed fully lower. The nearby contracts are taking the biggest hit, which makes sense that nearby markets would suffer the most as deferred markets have more hope that some long-term understanding will be reached before they trade more actively. March feeders closed $3.05 lower at $132.97, April feeders closed $3.47 lower at $134.12 and May feeders closed $2.55 lower at $135.80.

At Miles City Livestock Auction in Miles City, Montana; compared to last week, feeder calves weighing 600 to 649 pounds sold steady to somewhat higher and all other weights were too lightly tested to accurately noted however steady to firm undertones were noticed. Feeder heifers weighing 500 to 649 pounds were mostly steady. Higher undertones were noticed on heifers weighing less than 500 pounds and lower undertones for heifers weighing over 650 pounds. Demand for grass cattle remains mostly good while demand for heavy weight cattle was weaker this time around. The CME feeder cattle index 2/24/2020: down $1.30, $139.72.

LEAN HOGS:

The lean hog market was able to test time and closed with some nearby contracts slightly higher. April lean hogs closed $0.05 higher at $64.67, June lean hogs closed $0.25 lower at $79.70 and July lean hog hogs closed $0.47 lower at $80.80. The lean hog market has been supported by a relatively active and energized cash market, which can make all the difference in situations like these. Pork cutouts total 400.35 loads with 375.90 loads of pork cuts and 24.44 loads of trim. Pork cutout values: down $0.35, $65.97. Tuesday's slaughter is estimated at 495,000 head, 1,000 head more than a week ago and 21,000 head more than a year ago. The CME lean hog index 2/21/2020: up $0.04, $55.91.

WEDNESDAY'S CASH HOG CALL: Steady. It wouldn't be surprising to see the board sway back and forth with mild to extreme losses, but it seems like the lean hog cash market is fairly steady and packers continue to actively process hogs so they will need to keep their orders filled.

#completeherdhealth

Tuesday Midday Livestock Market Summary - Livestock Contracts Trade Mixed

General Comments

Seeing that some livestock contracts are still trading slightly higher into the noon hour solidifies the fact that Monday's move was overdone. The coronavirus needs to be carefully monitored but as humans we often tend to react before we know the facts which comes at the market's expense. March corn is steady and May soybean meal is steady. The Dow Jones Industrial Average is down 386.72 points and NASDAQ is down 104.28 points.

LIVE CATTLE

Live cattle contracts trade lower in nearby contracts and higher in deferred as the noon hour approaches. April live cattle are down $1.27 at $115.72, April live cattle are down $1.12 at $114.12 and June live cattle are down $0.67 at $106.70. The support for the live cattle market was weak before the Monday's run lower and it's apparent that the market is having a harder time regaining support and confidence from traders as the market cautiously picks few contracts to trade higher while the feeder cattle contracts and lean hog contracts are more bold in their moves.

Cash cattle trade has yet to really transpire as there are just a few scattered bids on the table in parts of Nebraska while the rest of country is quiet. A few asking prices are being reported in the North at $190 plus. There are 755 head of fats consigned to Wednesday's Fed Cattle Exchanged with four lots from Kansas (two with one-to-nine-day delivery, and the other two with one-to-seventeen day delivery) and the fifth lot from Texas with one-to-nine day delivery.

Boxed beef prices are mixed: choice up $0.20 ($207.27) and select down $0.52 ($201.85) with a movement of 68 loads (33.52 loads of choice, 14.77 loads of select, zero loads of trim and 19.62 loads of ground beef).

FEEDER CATTLE

Feeder cattle contracts are evenly split going into the noon hour with traders mildly interested. March feeders are up $0.47 at $136.50, April feeders are down $0.65 at $136.90 and May feeders are down $0.35 at $138.00. Though the market is trading higher in some instances, there's still an underlying tone of uncertainty and skittishness.

LEAN HOGS

The lean hog market is having the best come back as most of the complex trades higher and is being encouraged by a stronger cash market. April lean hogs are up $0.70 at $65.32, June lean hogs are $0.07 at $80.02 and July lean hogs are down $0.07 at $81.20. Out of the livestock markets, the lean hog market sits most confidently as time rolls into the noon hour.

The two-day lean hog index for 2/21/2020 is up $0.04 at $55.91, and the actual index for 2/20/2020 is up $0.09 at $55.87. Hog prices are higher on the National Direct Morning Hog Report, up $0.92 with a weighted average of $49.63, ranging from $45.00 to $51.00 on 4,436 head sold and five-day rolling average of $49.77. Pork cutouts total 250.74 loads with 235.87 loads of pork cuts and 14.86 loads of trim. Pork cutout values: down $0.44, $65.88.

#completecalfcare