DTN Midday Livestock Comments 04/03 12:23
Prices Even Lower at Midday
Sharp losses continue at midday Friday with active selling in all livestock
futures. The inability to hold early gains in cattle contracts is evidence of
the intensive bearish grip hanging onto the cattle market.
By Rick Kment
Limited buyer support early Friday morning was unable to hold through the
morning as general market weakness from earlier in the week returned, pushing
prices to limit losses in select contract months. May corn is down 4 1/4 cents
per bushel and May soybean meal is down $5.70. The Dow Jones Industrial Average
is lower 372 points and NASDAQ is down 125 points.
Sharp losses have slid into live cattle futures despite the early gains
which seemed to give a glimmer of hope for renewed buyer support. April live
cattle futures are limit lower with $4.50 per cwt losses, and prices are
setting new contract lows with little hope of additional late-day support. The
uncertainty and concern that beef demand will continue to erode and the
potential we will see further coronavirus outbreaks over the weekend is putting
more pressure on prices.
Cash cattle markets remain quiet Friday morning with bids still undeveloped.
At this point, the potential for cash markets to hold out until next week is
becoming a strong possibility as neither side seems willing to step up to the
table, with good reason. Asking prices seen earlier may or may not be on the
table still, given the bearish undertone of the market.
Boxed beef prices are lower: choice down $0.69 ($231.95) and select down
$1.11 ($221.01) with a movement of 37 loads (18 loads of choice, 6 loads of
select, no loads of trim and 13 loads of ground beef).
The inability to hold morning buyer support in feeder cattle futures has
sparked growing uncertainty through the entire cattle complex. Nearby losses
are from $4 to $4.50 per cwt, but with expanded trading limits, the potential
for late-Friday losses is even greater given that trading limits are at $6.75
for the session. This continues to add even more uncertainty to the entire
market going into the weekend. The hope that end-of-week short-covering could
bring some limited buying back to the market seems hard to fathom right now,
with additional losses developing.
Sharp losses continue to develop across the lean hog complex with June and
July futures holding limit losses of $4.50 per cwt at midday. The lack of
support in the complex based on uncertainty of domestic and export demand in
early April and is likely to add continued pressure through the rest of the
The projected lean hog index for 4/2/2020 is down $2.43 at $60.65 and the
actual index for 4/1/2020 is down $1.38 at $63.08. Hog prices are lower on the
National Direct Morning Hog Report, down $1.75 with a weighted average of
$42.83, ranging from $40.00 to $45.00 on 4,597 head sold and a five-day rolling
average of $50.53. Pork cutouts totaled 202.17 loads with 181.75 loads of pork
cuts and 20.42 loads of trim. Pork cutout values: up $1.51, $60.72.
Rick Kment can be reached at firstname.lastname@example.org
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