DTN Closing Livestock Comments

GENERAL COMMENTS

Cash cattle interest remains generally sluggish, although a few bids have developed through the day in all areas. Live bids of $120 per hundredweight (cwt) were seen across the South with dressed bids of $195 and higher in Nebraska. At this point, asking prices are still poorly defined in the North and seen at $125 and higher in the South. This could easily delay trade until late Thursday or Friday sometime. According to the closing report, the national hog base is $0.18 higher compared with the Prior Day settlement ($51-$60.50, weighted average $59.06). May corn futures closed 3/4 cent lower Wednesday. The Dow Jones Index was 152 points lower with the Nasdaq down 14 points.

LIVE CATTLE

Limited buyer activity at the end of the trading session caused spot contracts to erode. Futures closed $0.97 lower to $0.87 higher. Buyer activity in the morning trade helped to push all live cattle futures higher, but June and August futures were unable to draw additional trade activity through the last hour of trade and tumbled lower. Spot-month June led the market lower with a 97-cent-per-cwt loss. Beef cut-outs: higher, up $0.79 (select, $207.88) to $0.87 (choice, $227.30) with light demand and moderate offerings (49 loads of choice cuts, 31 loads of select cuts, 14 load of trimmings, 19 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

Steady to $2 higher. Activity through the cash cattle complex is expected to remain sluggish over the near term with asking prices still hard to define in some areas. A few bids have developed midweek, which may be the starting point for further talks, but overall trade may be delayed until Thursday or Friday.

FEEDER CATTLE:

Firm buyer support moved back into the complex late Wednesday, pushing futures $0.55 to $1.12 higher. Many traders focused on position-taking opportunities following double-digit losses Tuesday. Some additional underlying support is expected to be seen in most nearby contracts with prices holding 72- to 92-cent gains in nearby contracts. This most recent move could help draw additional support back into the market through the end of the week, though the overall tone of the market remains weak. CME cash feeder index for 5/1 is $139.13, down $0.14.

LEAN HOGS:

Late-day pressure eroded any buyer support that had moved into the market Wednesday morning. This led to increased concern of market weakness that has been seen the last couple of weeks. Lean hog futures closed $0.65 lower to $0.27 higher. The gains through the first half of the trading session seemed to be just too unsupported to draw additional buyers back to the market, as all but early 2019 contracts posted narrow-to-moderate losses. There continues to be some uncertainty about the amount of follow-through support that will move back into the market during early May. Pork prices moved firmly higher following strong triple-digit gains in several primal markets. Pork cut-out: $70.25, up $1.09. CME cash lean index for 4/30: $62.45, up $0.25. DTN Projected lean index for 5/1: $62.66, up $0.21.

THURSDAY'S CASH HOG CALL:

Steady to $1 higher. Limited market direction is still seen through the hog complex as packers continue to focus on gaining access to market-ready hogs. The firm gains in pork values during early day trade seem to be helping to solidify additional spending activity by some packers. Although the price offerings are expected to reach the full scope of this range, most bids are expected to be steady to firm. Total slaughter numbers Thursday are expected to be 465,000 head with an estimated 42,000 head Saturday.

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

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