Live cattle are feeling the spillover pressure from feeder cattle which is feeling the pressure from lean hogs. President Trump indicating tariffs on Chinese good will be raised to 25% on Friday may not have quite the impact on cattle as they will on hogs, but the reaction of the news has permeated the agricultural markets. Showlists have been distributed with buyers bidding lower due to the uncertainty of the political and well as futures markets. Boxed beef cut-outs are higher, choice are $0.59 higher with select $0.14 higher with light movement of 44 loads reported (23 loads of choice, 11 loads of select, 6 loads of trimming, and 4 loads of ground beef). Cattle slaughter today is projected at 121,000 head.
Feeder cattle came under severe pressure on spillover from hogs pushing futures to new contract lows. Prices have since rebounded substantially as the knee-jerk selling reaction ran its course. Nevertheless, further chart damage has been done and will take a monumental effort for traders to become friendly to the market. Lower feeder cattle are responsible for pressure on live cattle futures.
Nothing has been moving in lean hog futures since the opening bell with the exception of May, which has been trading, but slowly weakening. Futures have been locked limit down from the opening with a pool of sellers unable to get out of contracts or establish new short contracts. The news that President Trump will increase tariffs from the current 10% to $25% on Friday on Chinese products sent the market reeling. Further hopes of pork sales to China have been dashed. The National Dairy Direct cash hog report showed the weighted average price down $0.62 per cwt with a range of $75.00 to $81.00. The National Pork Plant report showed 95 loads selling, 89 loads pork cuts and 6 loads trim/process. Pork carcass valued added $1.54 per cwt at $83.55 per cwt. The projected lean hog index for 5/2 is $83.02 down $0.21 with a projected two-day index of $82.81 down $0.21. Estimated hog slaughter today is 471,000 head.
Robin Schmahl can be reached at: firstname.lastname@example.org
© Copyright 2019 DTN/The Progressive Farmer. All rights reserved.