DTN Midday Livestock Comments 04/02 12:23
Livestock Futures Continue Lower Thursday
Sharp losses have hit expanded trading limits in several feeder cattle and
lean hog futures contracts. The underlying bearishness through the complex
continues to build as concerns grow about the ability to sustain meat demand in
the near future.
By Rick Kment
Sharp losses have swiftly and aggressively moved into all livestock trade,
which is causing many contracts to hit expanded trading limits. The uncertainty
through the complex continues to focus on the concern that meat prices may
continue to erode as demand uncertainty is developing. May corn is up 1/4 cents
per bushel and May soybean meal is down $4.70. The Dow Jones Industrial Average
is up 240.94 points and NASDAQ is up 68.91 points.
Sharp losses have quickly developed through the entire live cattle complex
with pressure increasing as the day progresses. This has pushed April futures
to the expanded trading limit, causing increased underlying concerns as several
contracts have moved to new lows. April live cattle contracts are down $4.50 at
$92.82, June live cattle contracts are down $3.87 at $83.60 and August live
cattle contracts are down $3.50 at $85.60. There is expected to be increased
underlying pressure through the entire cattle complex as the support seen in
energy and financial markets has been unable to calm overall fears that
consumer demand for beef may continue to erode over the near future.
Cash cattle activity remains at a standstill with packer interest quiet
given the strong pressure in futures trade and further erosion in beef values.
Asking prices remain at $114 to $115 per cwt live in the South and $183 and
higher dressed across the North. It is possible that additional trade may be
delayed until sometime Friday given the overall lack of interest so far
Thursday. Both sides are looking for increased underlying stability over the
coming days before actively stepping into the market.
Boxed beef prices are lower: choice down $1.62 ($233.55) and select down
$1.07 ($224.06) with a movement of 55 loads (24.67 loads of choice, 8.19 loads
of select, 16.79 loads of trim and 5.84 loads of ground beef).
Sharp losses have continued to hold through the entire complex with
expanding trading limits. This may add increase pressure through the end of the
week. April feeders are down $5.42 at $112.00, May feeders are down $6.30 at
$112.15 and August feeders are down $6.75 at $117.65. The underlying pressure
in all cattle trade is expected to continue to put pressure on cash feeder
cattle sales through the week.
Nearby lean hog futures are locked in expanded trading limits Thursday
concerning widespread pressure expected to continue in pork values. Even though
moderate sales of pork were reported to China in the morning export sales
report, the focus on uncertain demand support from domestic and export markets
combined with still aggressive pork production levels through most of the
summer has lean hog trade setting new contract lows Thursday morning.
The projected lean hog index for 4/1/2020 is down $1.38 at $63.08 and the
actual index for 3/31/2020 is down $0.69 at $64.46. Hog prices are higher on
the National Direct Morning Hog Report, up $0.05 with a weighted average of
$48.42, ranging from $45.00 to $50.50 on 2,146 head sold and a five-day rolling
average of $54.67. Pork cutouts totaled 210.18 loads with 186.41 loads of pork
cuts and 23.77 loads of trim. Pork cutout values: down $1.95, $63.09.
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