DTN Midday Livestock Comments

GENERAL COMMENTS:

Cattle futures move lower in most contract months Monday morning as traders try to square positions ahead of month-end. Despite firm losses seen in early minutes of lean hog trade, short covering has started to develop, pushing nearby contracts moderately higher. Sluggish trade is expected to be seen through all livestock trade through the end of the Monday session. Corn prices are higher in light trade. May corn futures are 4 cents higher. Stock markets are mixed in light trade. The Dow Jones is 25 points higher while Nasdaq is down 34 points.

LIVE CATTLE:

Mixed to mostly lower trade developed late Monday morning with traders looking for increased overall support in the lightly traded April contract. The rest of the cattle market remains under pressure although trade volume is extremely sluggish. Most traders Monday have overlooked fundamental and technical shifts in the market and are focusing on end of the month adjustment opportunities following the aggressive rally seen during the month of April. Prices in April futures have rallied nearly $15 per cwt higher during the month, allowing many traders trying to square positions. Cash cattle interest is undeveloped with show list distribution and inventory taking the main order of business for the day. Even if packers need access to more cattle, they are likely to not float any bids at this point due to end of the month activity seen Monday. The light trade seen last week may help to spur additional interest, but we have seen many times that packers are able to manage until Thursday or Friday, and this week may not be any different. Boxed beef cut-outs at midday are higher, $0.88 higher (select) and up $2.76 per cwt (choice) with light movement of 56 total loads reported (23 loads of choice cuts, 18 loads of select cuts, 6 loads of trimmings, 9 loads of ground beef).

FEEDER CATTLE:

Triple-digit losses are seen Monday morning with extremely sluggish trade volume is allowing traders to quickly back away from late-week gains. The overall tone of the market is not likely to be affected by the move Monday due to most of the activity associated with late month position squaring. May feeder cattle futures are trading $1.12 per cwt lower with August futures leading the market lower with losses of $1.52 per cwt. The strong $6 per cwt discount continues to be seen in May futures as traders look for more long-term direction and potential buyer support developing through the summer months.

LEAN HOGS:

Light to moderate buyer support is seen in nearby contracts on the last session of April. The support seen in the market is focusing more on end of month positioning as traders turn attention on short covering activity. The general pressure seen over the last week is creating a great opportunity for light buyer support to move into the market midday. Even though prices ventured lower early Monday, the overall lack of volume and trade activity is not expected to be a factor as buyers try to insert their market direction into late April activity. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.07 at $58.28 per cwt with the range from $56.50 to $58.43 on 4,640 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $0.36 at $57.91 per cwt with the range from $56.50 to $58.25 on 1,330 head reported sold. The National Pork Plant Report posted 155 loads selling with carcass values adding $0.13 per cwt. Lean hog index for 4/26 is at $61.75 up 0.52 with a projected two-day index of $62.20, up 0.45.

Rick Kment can be reached at rick.kment@dtn.com

(SK)

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