Wednesday Midday Livestock Market Summary - Livestock Contracts Trade Higher

General Comments

Livestock contracts roll into noon hour fully higher. The cash markets are mixed as cash hog prices are higher, but cash cattle prices are seeming like they may be lower again this week. May corn is up 3 3/4 cents per bushel and May soybean meal is up $0.30. The Dow Jones Industrial Average is up 617.00 points and NASDAQ is up 163.09 points.

LIVE CATTLE

Live cattle contracts trade fully higher ranging from $0.62 to $1.35 higher. April live cattle are up $0.90 at $111.05, June live cattle are up $1.32 at $104.70 and August live cattle are up $1.27 at $104.82. Despite the board trailing higher Wednesday morning, cash cattle trade is starting to develop in the South for $113, $2.00 lower than last week's weighted average. Cattle have yet to trade in the North and will most likely hold off trading until sometime Thursday or Friday.

The Fed Cattle Exchange Auction reported a total of 566 head, in three different lots (one each from Kansas, Nebraska and Texas). Asking prices were $114 on all the lots, but none sold.

Boxed beef prices aredelayed due to technical issues.

FEEDER CATTLE

Feeder cattle prices have kept their rally as noon approaches and contracts show substantial double-digit gains in nearby contracts. March feeders are up $1.60 at $135.12, April feeders are up $2.15 at $135.92 and May feeders are up $2.55 at $136.60. Despite the board being back and forth and trading on both sides of steady throughout the week, most sale barn markets have been able to market calves extremely well if they have enough come in to attract buyers.

LEAN HOGS

Higher and higher, the hog market sees higher cash prices and a higher board Wednesday morning. April lean hogs are up $1.15 at $64.70, June lean hogs are up $1.07 at $79.15 and July lean hogs are up $0.95 at $80.42. Knowing that the market is being supported from both sides of the market makes it more likely for the rally to keep its steam throughout the end of the day so long as one side doesn't weaken.

The projected lean hog index for 3/03/2020 is up $0.24 at $56.46, and the actual for 3/02/2020 is down $0.03 at $56.22. Hog prices are higher on the National Direct Morning Hog Report, up $0.75 with a weighted average of $50.75, ranging from $45.00 to $53.00 on 7,700 head sold and a five-day rolling average of $50.45. Pork cutouts total 177.21 loads with 160.93 loads of pork cuts and 16.28 loads of trim. Pork cutout values: up $0.18, $66.23.

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Wednesday Morning Livestock Market Summary - Market Uncertainty Continues

GENERAL COMMENTS:

Limited interest has yet to be seen in cash cattle markets with feeders and packers still hesitant to place their foot on base given the uncertainty of direction in futures and wholesale beef values. Although it is still expected that light-to-moderate cash trade will be needed by the end of the week, it could be Wednesday or later before feeders put firm prices on cattle for the week, and bids could be delayed until the last half of the week. The lack of aggressive selling pressure in futures trade last week is helping cash participants not panic, but feeders seem content to try to dig prices out of last week's price depression in order to focus on a more fundamentally balanced market level. Futures trade is expected mixed in limited early trade following the moderate-to-strong price pressure developing late Tuesday. Traders are focusing more on the inability to hold strong early gains, which indicates that initial support Tuesday was overextended, but the strong push lower in the stock market had a lot to do with the change in cattle market mentality. The Dow Jones went from a triple-digit gain to a triple-digit loss by the end of the day Tuesday as renewed concerns about how coronavirus will affect the economy and overall consumer demand for most products. This is expected to keep live cattle and feeder cattle trade mixed in early trade, and once again dependent on the movement in outside markets. Wednesday slaughter is expected near 121,000 head.

Moderate-to-firm support on Tuesday is expected to create a firm undertone in the entire lean hog complex as traders focus on the potential that China may be getting back to a more normal pattern through the upcoming weeks. This may help to stimulate the much-expected boost in pork demand through the spring and summer months, although transportation issues may start to be one of the biggest challenges as backlogs continue to develop due to coronavirus issues. The most aggressive support in lean hog futures was in the summer and fall contract months, which is expected to bring about increased underlying support as traders look forward to more long-term demand support in domestic and global markets. The lean hog futures complex has not been hit nearly as hard as other markets over the last week for the sole reason that most of the aggressive losses surrounding coronavirus were seen in late January based on the impact in China. With the pork market putting so much emphasis on China and its need for pork, this has helped to limit the additional risks to pork prices due to domestic demand still remaining strong. 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 197,000 head.

	BULL SIDE		BEAR SIDE
1)	Wholesale beef values still continue to show underlying support through the week despite the late day pullback in futures trade Tuesday. The lack of aggressive beef market pressure while live cattle futures have tumbled lower still indicates that sharp changes in consumer buying patterns have not been seen.	1)	Strong market pressure in feeder cattle trade quickly changed the course of cattle futures Tuesday. This market reversal brought traders back to the reality that coronavirus issues are not yet behind us and more market uncertainty will be seen.
2)	Spot month April live cattle trade still remains nearly $3 per cwt above support levels established last week. Without aggressive follow-through liquidation or new domestic outbreak information in the near future, buyers are likely to move back into the market despite Tuesday's losses. This could help to regain commercial buyer interest through the end of the week.	2)	Cash cattle markets remain weak with limited momentum to regain lost ground last week. The inability for futures trade to hold early week gains and continue to shift higher could leave even more uncertainty when it comes to cash business through the end of the week.
3)	Triple-digit gains have held in lean hog trade Tuesday despite a 735 point loss in the Dow Jones Index and weakness in cattle trade. This is pointing to renewed long-term expectations that buyer interest will redevelop in China over the coming weeks and months, helping to solidify pork market support.	3)	Pork cutout values failed to hold early week support. This is creating questions of sustaining current wholesale and retail prices for pork through the spring and summer months.
4)	Open interest in lean hog futures is starting to rebound as traders focus on potential short- and long-term support levels over the past month holding and creating additional buyer support through the month of March.	4)	Strong pork production will continue to limit the upside potential of the lean hog futures complex in the near term. Until significant changes are seen in export sales and deliveries, especially to China, it is likely that lean hog prices will remain stuck in a sideways trend near the bottom of the current trading range.

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Tuesday Closing Livestock Market Summary - "Not So fast," Yells the Coronavirus

GENERAL COMMENTS:

Cattle contracts lost their support midday afternoon Tuesday and couldn't close the day with higher prices throughout any of the sector. Meanwhile, the lean hog market closed fully higher even with cash prices being lower.

Hog prices close lower on the National Direct Afternoon Hog Report, down $0.10 with a weighted average of $50.12. May corn is up 5 3/4 cents per bushel and May soybean meal is up $1.20. The Dow Jones Industrial Average is down 785.91 points and NASDAQ is down 268.07 points.

LIVE CATTLE:

Live cattle contracts fell through closing Tuesday, with more position lost in deferred contracts than nearby. April live cattle closed $0.05 at $110.10, June live cattle closed $0.60 lower at $103.37 and August live cattle closed $0.80 lower at $103.55. This may seem like somewhat of a kick to the teeth because the market was vibrant coming into the week and closed higher, but its crucial that we all remember in times like these that the market is laced with emotion and uncertainty. Trends take time to establish and it takes even longer for cattle producers and traders alike to shake bad news. Cash cattle trade has yet to surface and feeders are hesitant on placing bids on their cattle too soon. Both packers and feeders want to see where this week is headed before business gets underway.

Boxed beef prices closed higher: choice up $1.23 ($206.53) and select up $2.25 ($201.16) with a movement of 79 loads (47.74 loads of choice, 14.16 loads of select, 7.69 loads of trim and 9.10 loads of ground beef). Tuesday's slaughter is estimated at 124,000 head, steady with a week ago and 3,000 head more than a year ago.

WEDNESDAY'S CASH CATTLE CALL: Steady. It takes a strong market to concur and push higher when the future's market is lower and right now the cash market has little to no leverage.

FEEDER CATTLE:

Feeder cattle contracts feel through closing and tumbled lower hand in hand with live cattle contracts. March feeders closed $0.20 lower at $133.52, April feeders closed $1.27 lower at $133.77 and May feeders closed $1.92 lower at $134.05. As you can see the board and the cash market are in turmoil. It's important to remember that even though there may be some good days with higher prices and higher closings, trends take time to establish.

At OKC West Livestock Auction in El Reno, Oklahoma, 1,500 head of feeders sold, and in comparison to last week steer calves sold $3.00 to $8.00 higher, with instances of 400 to 500 pound steers bringing $10.00 higher. Heifers calves traded $5.00 to $10.00 higher as well. Demand was phenomenal, and quality was just average. The CME feeder cattle index 3/2/2020: up $0.48, $134.00.

LEAN HOGS:

The lean hog market was the only livestock contract able to close the day steadily higher. April lean hogs closed $0.75 higher at $63.55, June lean hogs closed $1.05 higher at $78.07 and July lean hogs closed $1.50 higher at $79.47. Some of vibrancy coming from the lean hog market could be stemming from the China's announcement that they have developed a vaccine for ASF. They did not share when the vaccine will be on the market, but progress is being made. Pork cutouts totaled 387.45 loads with 347.80 loads of pork cuts and 39.65 loads of trim. Pork cutout values: down $0.05, $66.05. Tuesday's slaughter is estimated at 495,000 head, steady with a week ago and 20,000 head more than a year ago. The CME lean hog index 2/28/2020: down $0.08, $56.25.

WEDNESDAY'S CASH HOG CALL: Steady. With so much commotion pinging off the market, cash hogs could trade higher with positive news about the African swine fever vaccine, but if more news about the coronavirus breaks the market could easily trade lower.

#completeherdhealth

Tuesday Midday Livestock Market Summary - Lean Hogs Higher, Cattle Contracts Trade Split

General Comments

Cattle contracts are struggling to rally deferred contracts while nearby contracts trade with little hesitation. The lean hog market; on the other hand, trades fully higher into the noon hour and shows no weakness whatsoever. May corn is up 6 1/2 cents per bushel and May soybean meal is down $0.10. The Dow Jones Industrial Average is down 345.36 points and NASDAQ is down 83.35 points.

LIVE CATTLE

Live cattle contracts have picked up and run with excitement in nearby contracts while the deferred contracts show a little more resistance.

April live cattle are up $0.70 at $110.85, June live cattle are up $0.55 at $104.55 and August live cattle are up $0.32 at $104.67. The country remains quite Tuesday morning with bids and asking prices still not established and little conversation has been had so far on where trade will end up this week. Given the fact that trade is looking like it will be delayed until the later part of the week is a positive sign for feeders and they may able to squeeze some profits out of packers this week as packers continue to aggressively kill cattle and keep retail shelves stocked.

There are 566 head of fats consigned to Wednesday's Fed Cattle Exchange, with one pen from Texas, Kansas and Nebraska each. The pens from Kansas and Texas offer one-to-nine-day delivery, while the pen from Nebraska offers delivery for one-to-seventeen days.

Boxed beef prices are higher: choice up $1.29 ($206.59) and select up $0.96 ($199.87) with a movement of 37 loads (26.28 loads of choice cuts, 4.59 loads of select, zero loads of trim and 5.83 loads of ground beef).

FEEDER CATTLE

Feeder cattle contracts have held onto most of the day's progression though some deferred contracts are showing some resistance and have began to trade lower as the noon hour approaches. March feeders are up $1.10 at $134.82, April feeders are up $0.75 at $135.80 and May feeders are up $0.42 at $136.40. Last week feeder cattle prices on average cross the country dropped anywhere from $5.00 to $10.00 lower. If fat cattle are able to raise prices higher, even $1.00 higher, some optimism may flow into the feeder cattle market is the board keeps trading higher.

LEAN HOGS

The lean hog market steps to the plate and takes Tuesday with ease as all contracts are trading $0.37 to $0.97 higher. April lean hogs are up $0.97 at $63.77, June lean hogs are up $0.60 at $77.62 and July lean hogs are up $0.77 at $78.75. Seeing the board strengthen without support from a strong cash market is a strong indication that the board is moving with confidence.

The projected lean hogs index for 3/02/2020 is down $0.03 at $56.22, and the actual for 2/28/2020 is down $0.08 at $56.25. Hog prices are lower on the National Direct Morning Hog Report, down $0.21 with a weighted average of $50.01, ranging from $45.00 to $52.00 on 3,925 head sold and a five-day rolling average of $50.25. Pork cutouts total 176.21 loads with 165.10 loads of pork cuts and 11.11 loads of trim. Pork cutout values: up $0.24, $66.79.

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