Thursday Closing Livestock Market Summary - Livestock Futures Lower Again

GENERAL COMMENTS:

Another day of emotionally fueled market uncertainty strikes the livestock sector; leaves the complex exhausted and inconclusive about what's to come in the upcoming days. Hog prices are higher on the National Direct Afternoon Hog Report, up $0.20 with a weighted average of $50.22. May corn is down 6 1/2 cents per bushel and May soybean meal is up $5.30. The Dow Jones Industrial Average is down 1,190.95 points and NASDAQ is down 414.29 points.

LIVE CATTLE:

Lower, lower and lower yet again drops the board. The coronavirus has worked the cattle contracts over and left them with no choice but to trade lower in nearby contracts. Like the feeder cattle complex, the live cattle contracts closed lower in nearby markets and slightly higher in deferred. April live cattle are down $1.87 at $110.47, June live cattle are down $1.10 at $103.92 and August live cattle are down $0.50 at $104.47. The majority of cash trade is done for the week, but a little bit of clean up trade did surface in parts of the North Thursday afternoon. Dressed cattle traded anywhere from $183 to $185, which is steady to slightly lower than the earlier prices developed this week.

Boxed beef prices closed mixed: choice down $0.80 ($205.54) and select up $1.09 ($199.69) with a movement of 182 loads (122.19 loads of choice, 34.12 loads of select, 0 loads of trim and 25.50 loads of ground beef). Thursday's slaughter is estimated at 122,000 head, steady with a week ago and 3,000 head more than a year ago.

FRIDAY'S CASH CATTLE CALL: Steady. If any trade transpires Friday it will only be clean up trade and most likely will trade within the prices already established this week.

FEEDER CATTLE:

Feeder cattle contracts recovered a little piece of the market as the day's end neared. Nearby contracts closed $1.32 to $1.90 lower while deferred contracts closed $0.15 to $0.87 higher. March feeders are down $1.50 at $132.57, April feeders are down $1.90 at $134.07 and May feeders are down $1.32 at $135.55. Even though the feeder cattle complex closed mixed rather than just lower, the day is hardly considered to be in a better situation as uncertainty looms.

At Clarinda Livestock Feeder Cattle Auction in Clarinda, Iowa, compared to last week, all classes and weighs were sharply lower, except 400 to 450-pound heifers that sold steady to $1.00 higher. Steers weighing 500 to 700 pounds sold $10.00 to $15.00 lower and the steers weighing 750 to 950 pounds were $5.00 to $10.00 lower. Heifers weighing 450 to 600 pounds sold $1.50 to $8.00 lower, while heifers weighing 650 to 800 pounds sold $5.00 to $8.00 lower. Trade was relatively active but the demand for heavier weight brackets was weak. The CME feeder cattle index 2/26/2020: not available at this time.

LEAN HOGS:

The lean hog market didn't fair very well through Thursday's wake as contracts fell $0.95 to $2.60 lower. April lean hogs are down $2.60 at $62.55, June lean hogs are down $2.35 at $78.05 and July lean hogs are down $2.20 at $79.40. The one bright thing that can be said through this whole process is that thankfully packers have continued to be aggressive in their kills -- on the pork side, in their cash market purchases as well. Pork cutouts totaled 329.70 loads with 297.62 loads of pork cuts and 32.08 loads of trim. Pork cutouts values: down $0.20, $64.29. Thursday's slaughter is estimated at 494,000 head, 2,000 head more than a week ago and 19,000 head more than a year ago. The CME lean hog index 2/25/2020: up $0.25, $56.41.

FRIDAY'S CASH HOG CALL: Steady. Seeing that the market isn't coming to terms with the coronavirus, it would be unlikely for the cash market to advance notably, but steady consistent gains like what we have seen over the last week could very well continue.

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Thursday Midday Livestock Market Summary - Livestock Contracts Dive Lower -- Again

General Comments

The back and forth nature of this week's trade really emphasizes the stark reality of when emotion rules the marketplace. One day markets crash lower, the next day their losses are only minimal, then the market begins to trade higher, but then dives lower again. The back and forth uncertainty pushes traders away as the marketplace is too volatile and it suppresses prices in the cash market as both markets are emotionally tied. We know that markets as vulnerable as the people that trade within their reach, but unprecedented volatility creates a lot of distrust which takes a long time to come back around. May corn is down 7 cents per bushel and May soybean meal is up $3.40. The Dow Jones Industrial Average is down 394.96 points and NASDAQ is down 152.51 points.

LIVE CATTLE

Live cattle contracts haven't been able to escape from Thursday's pressure and are trading fully lower. April live cattle are down $1.60 at $110.80, June live cattle are down $1.00 at $104.02 and August live cattle are down $0.57 at $104.40. Cash cattle trade seems to more or less done for the week as Thursday morning has been quiet from both packers and feeders. Asking prices for cattle that are still available are $117-plus in the South and $187-plus in the North.

Boxed beef prices are mixed: choice down $0.50 ($205.84) and select up $1.24 ($199.84) with a movement of 101 loads (77.45 loads of choice, 11.67 loads of select, 0 loads of trim and 12.06 loads of ground beef).

FEEDER CATTLE

Feeder cattle contracts are trading with some triple digit losses in nearby contracts as noon approaches. March feeders are down $3.15 at $130.92, April feeders are down $3.72 at $132.25 and May feeders are down $3.22 at $ 133.65. At this point, the back and forth ambiguity of the coronavirus scare has the marketplace in utter turmoil.

LEAN HOGS

Over the last couple of days the lean hog market has been able to manage some damage control with help form a strong cash market. Thursday morning cash hog prices are higher but the lean hog future's contracts aren't able to let cattle contracts take all of the heat this time around. April lean hogs are down $1.97 at $63.17, June lean hogs are down $1.92 at $78.47 and July lean hogs are down $1.95 at $79.65.

The projected lean hog index for 2/26/2020 is down $0.05 at $56.36, and the actual index for 2/25/2020 is up $0.25 at $56.41. Hog prices are higher on the National Direct Morning Hog Report, up $0.15 with a weighted average of $50.17, ranging from $45.00 to $52.00 on 7,040 head with a five-day rolling average of $50.07. Pork cutouts total 194.84 loads with 174.04 loads of pork cuts and 20.80 loads of trim. Pork cutout values: up $1.94, $66.43.

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Thursday Morning Livestock Market Summary - Livestock Futures Cautious of Market Support

GENERAL COMMENTS:

Cash business may be done for the week following light-to-moderate trade that developed Tuesday and Wednesday. Most of the trade on Wednesday was seen as clean-up activity with prices steady with earlier trade this week. But these prices are $3 to $5 per cwt below last week's trade levels. Live Southern trade is at $115 per cwt for the week, while dressed trade in the North posted a wider range from $184 to $187 per cwt, but both sides are willing to move into the first week of March as they try to reestablish market stability in an unstable market. Futures trade is expected mixed in limited early trade. This continues to focus on the potential that buyers are willing to step back into the complex following the aggressive sharp losses early in the week. The continued weakness in outside markets and inability for stock markets to hold early gains is keeping additional focus on recent market weakness. Triple-digit gains in nearby feeder cattle trade through the session Wednesday was a good sign, but the inability to sustain early gains in live cattle trade continues to add uncertainty in the complex. With April and June live cattle futures currently hovering above long-term support set last August and September, the question of whether these support levels will hold is becoming a significant reality. If April futures do break below $110.17 per cwt, the potential that additional widespread commercial liquidation may quickly move into the complex increases significantly. Even though most of the focus remains on global instances of coronavirus, the underlying concern remains how the market will be able to hold if increased outbreaks are seen in the U.S. Wednesday slaughter is expected near 121,000 head.

Active buyer support slowly but steadily moved into lean hog futures trade Wednesday. Sustaining higher prices in the summer and fall contracts helped to change the narrative from the recent widespread market losses, which developed through the week. Although the overall tone still remains weak, it is very possible that the lean hog futures has found short-term support levels. We have to remember that widespread market losses surrounding coronavirus is not new to the lean hog complex. Although this week has rocked most other commodity and stock markets as coronavirus has become a global issue and not just an issue that plagued China. The dependence that lean hog and pork markets have on Chinese trade already was hit hard by coronavirus concerns as it moved through China during late January. It is likely that January support levels will likely hold in nearby and deferred lean hog trade as traders find a way to establish a more stable sideways trend within the wide market range seen in the last two months. Traders will closely be watching the weekly export sales numbers. This week's report would be the first indication of any phase-one buying from China following the implementation period after the deal was signed. Although I wouldn't hold my breath for strong China sales in the report, a firm bounce in export numbers would significantly help the short-term outlook of the market. Cash hog prices are called $1 lower to $1 higher with most bids expected steady to firm. Slaughter Wednesday is expected at 495,000 head. Saturday runs are expected at 90,000 head.

	BULL SIDE		BEAR SIDE
1)	Strong triple-digit gains Wednesday in feeder cattle futures was a breath of fresh air for cattle markets as traders look for potential stability following early week losses.	1)	Continued pressure in cash cattle trade Wednesday confirmed earlier week losses. Although the market remains within early week price ranges, the fact that cash cattle prices fell $3 to $6 per cwt from last week's levels is weighing heavily on the entire complex.
2)	Open interest in live cattle trade continues to hold surprisingly well through this latest round of market pressure. This indicates that active commercial and noncommercial support still remains interested in cattle markets, and will likely step back to the plate once the dust settles, likely over the next couple of days.	2)	Strong follow-through pressure is seen in boxed beef values Wednesday. Although this is not a huge surprise given the aggressive losses in futures and cash markets, the concern that this weaker beef price move will impact longer-term spring and summer prices becomes a significant possibility.
3)	Continued firm support in cash hog values has helped to move the focus away from recent pressure in futures and pork values. With increased trade focusing on the current hog supplies, the need for packers to push cash values higher is a refreshing sign of potential market current-ness.	3)	Pressure developed in pork values with the cutout value falling $1.48 per cwt Wednesday. This is expected to limit the ability for active buyer support to move into the cash or futures trade in the near future, potentially leaving end of week trade generally flat.
4)	Active gains moved into summer and fall lean hog futures trade Wednesday. This move higher could likely be the turning point in lean hog futures, which sets market support during the week. The ability for June futures to hold prices above $80 per cwt would quickly spark renewed market interest through the upcoming weeks.	4)	Growing uncertainty of how coronavirus will impact global markets and overall consumer demand has the greatest long-term impact on pork markets based on the larger percent of U.S. pork sold in export markets compared to beef. This will continue to limit overall buyer support and the potential for hog prices to rebound sharply.

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Wednesday Closing Livestock Market Summary - Livestock Contracts Close Mostly Higher

GENERAL COMMENTS:

The livestock contracts closed Wednesday with a breath of fresh air as most contracts were able to close higher. The lean hog and feeder cattle contracts closed higher with no problem at all, but the live cattle market is on steeper climb as the markets not only faced pressure from the coronavirus but also weaker cash cattle prices. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.42 with a weighted average of $50.02. March corn is down 2 cents per bushel and May soybean meal is up $5.30. The Dow Jones Industrial Average is down 123.77 points and NASDAQ is up 15.16 points.

LIVE CATTLE:

The live cattle sector was the only market to close lower on Wednesday's last bell and struggled to rally support mainly in nearby contracts. But unlike the other two livestock markets, the live cattle market has to work against two factors, the obvious coronavirus and a weakening cash market. Unlike the futures market, the cash market doesn't bounce back from dramatic swings within the week as easily as the board can. Once cash cattle trade is tested and established for the week, it's really hard to change the tone/price later in the week. There was some light cash cattle trade Wednesday afternoon, but it was mostly clean up in nature. The South in mostly done trading for the week, but more cattle could still trade in the North.

Boxed beef prices closed lower: choice down $1.13 ($206.34) and select down $1.30 ($198.60) with a movement of 164 loads (103.73 loads of choice, 27.38 loads of select, 18.00 loads of trim and 15.11 loads of ground beef). Wednesday's slaughter is estimated at 123,000 head, 1,000 head more than a week ago and 4,000 head more than a year ago.

THURSDAY'S CASH CATTLE CALL: Steady with the week's trend. Seeing that the heart of the South is predominately done with the week's trade already, it makes it hard for the cash market to do anything else but trade within the week's pre-established range.

FEEDER CATTLE:

Feeder cattle contracts held most of their momentum through closing and thankfully closed higher than Tuesday's last mark. March feeders are up $1.10 at $134.07, April feeders are up $1.85 at $135.97 and May feeders are up $1.07 at $136.87. Seeing traders are interested in the livestock markets again puts some comfort back into the marketplace, though there are still questions unanswered about the coronavirus. At Winter Livestock in Dodge City, Kansas, compared to a week ago, feeder steers sold $5.00 to $8.00 lower. Feeder heifers sold $6.00 to $9.00 lower. Weaned calves sold $4.00 to $7.00 lower on a limited sample. The CME feeder cattle index 2/25/2020: down $0.11, $139.61.

LEAN HOGS:

The lean hog market closed strong as gains ranged from $0.20 to $0.80. April lean hogs are up $0.47 at $65.15, June lean hogs are up $0.70 at $80.40 and July lean hogs are up $0.80 at $81.60. Seeing that the market was able to trade not only higher throughout the day but close higher on the board, all while capturing higher cash prices, sets a positive demeanor heading into the later part of the week's trade. Pork cutouts total 317.19 loads with 273.81 loads of pork cuts and 43.38 loads of trim. Pork cutout values: down $1.48, $64.49. Wednesday's slaughter is estimated at 495,000 head, 3,000 head more than a week ago and 19,000 head more than a year ago. The CME lean hog index 2/24/2020: up $0.25, $56.16.

THURSDAY'S CASH HOG CALL: Steady. Seeing that the market closed higher on the board and in the cash market leads one to think that, with aggressive kills, the cash market should have no trouble keeping the pace it has been at over the last couple of days. If for some reason the coronavirus panic strikes up again, the cash market will have a hard time trading in the midst of emotional panic.

#completeherdhealth