DTN Livestock Midday: Sluggish Trade Keep Markets Stable

Lack of direction and market activity is seen early Monday. This is allowing for mixed moves in cattle futures, while slow but steady gains have worked into hog trade.

General Comments

Firm buyer support continues to develop in late 2019 and early 2020 lean hog contracts, although limited movement is seen in nearby trade. Cattle futures are narrowly mixed with limited activity.

Corn futures are higher in light trade. May corn futures are 1 1/2 cents higher. Stock markets are lower in light trade. Dow Jones is 67 points lower with Nasdaq down 33 points.

LIVE CATTLE:

Inactivity through the entire complex continues to be seen through the entire complex, with prices hovering on either side of unchanged with limited volume developing Monday. The overall lack of movement is somewhat surprising following the firmer cash cattle trade last week and stronger tone in most other markets.

Very little additional market direction is expected through the upcoming hours, allowing markets to potentially hold current levels at closing bell.

Cash cattle activity remains sluggish Monday following light to moderate trade last week. Although packers remain short bought once again, it is not expected that cattle will be bought for this week’s delivery. This could cause most sales to be delayed until later in the week. Show list distribution and inventory taking is the priority Monday.

Boxed Beef cut-outs at midday are higher, $0.10 higher (select) and up $2.48 per cwt (choice) with light movement of 51 total loads reported (24 loads of choice cuts, 13 loads of select cuts, 3 loads of trimmings, 10 loads of ground beef).

FEEDER CATTLE:

Mixed trade seen through the entire morning is gaining limited support at midday. Prices are steady to 15 cents per cwt higher following the expectation that additional underlying support is lily to move into live cattle trade. The moderate to firm buying support in grain trade has had little impact on pressuring feeder cattle markets Monday.

Early cattle on feed estimates expect March placements to be nearly 4% ahead of year-ago levels, this is doing very little to add pressure to the complex Monday, but the upside of the market is likely to be limited by growing feeder placements.

LEAN HOGS:

Traders through the hog complex have settled down over the weekend, as initial activity held narrow market shifts with limited direction or volume moving into the complex. Other than the expectation that a trade deal with China continues to progress with each session of talks, and additional sales to China are likely to spark follow-through support through the spring, traders have little additional information through the morning.

Nearby gains are holding narrow to moderate gains, while deferred futures are posting more aggressive triple-digit market shifts higher through Monday morning.

Cash prices are unreported at this time on the National Direct morning cash hog report.

Cash prices are unreported at this time on the Iowa/Minnesota Direct morning cash hog report.

Pork values continue to gain support following recent underlying futures moves despite light trade. Pork cutouts added $2.50 per cwt at $88.21 per cwt with 90 loads traded. Lean hog index for 4/11 is $79.34 down 0.02, with a projected two-day index is $79.57 up 0.23.

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