The liquidation phase seems to have run its course with the market in a corrective bounce. It is likely the top has been reached for the market especially if beef demand is slowing. As feared, the decline of futures over the past two days has provide packers with some leverage. There is some light trade that has developed in Nebraska with live trade at $127 and dressed at $204. These are $1.00 lower than last week. The market is still untested as the majority of the business will take place later in the week, but this does set the tone. Projected cattle slaughter is 117,000 head. Boxed beef cut-outs are lower with choice down $0.09 and select down $0.36. Movement is good with 75 loads reported (43 loads of choice cuts, 23 loads of select cuts, and 9 loads of ground beef.
Feeder cattle futures show moderate gains up a similar amount as live cattle. The market is assessing the steep decline of the past two days triggered by the Cattle on Feed report. It may take a monumental effort to regain the losses of nearly $3.00. However, even with the losses, futures are generally in a sideways to higher pattern with the exception of March.
Lean hogs are on fire for the third-consecutive day, posting triple-digit gains early. However, April and June have since dropped back as short-covering and buying interest may have run its course. Later contracts continue to post gains. Cash prices are lower on the National Direct morning cash report. The weighted average price is down $0.36 at $49.19 per cwt with a range of $44.00 to $52.00. The National Pork Plant report posted 166 loads selling. There were 143 loads of pork cuts and 23 loads of trim/process. Pork carcass values increased $0.17 per cwt at $67.79 per cwt. Projected hog slaughter is 476,000 head. The lean hog index for 3/11 is $52.38, up $0.40 with a projected two-day index of $53.12, up $0.74.
Robin Schmahl can be reached at: firstname.lastname@example.org
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