DTN Livestock Midday: Limited Volume Keeps Prices Mixed

Sluggish market activity is seen in all livestock markets with cattle prices mixed in a narrow to moderate range while hog trade has broken away from early nearby pressure.

General Comments

Mixed trade is holding in cattle and hog futures midday Wednesday following limited volume. Early pressure in nearby lean hog futures quickly eroded, allowing for renewed sense of market stability as traders focus on current fundamentals. Firm gains have continued to hold in deferred lean hog futures as traders anticipate Chinese buying to support the complex both short and long term. It is expected that activity through the end of the week will remain subdued as traders prepare for the long Easter weekend. Futures trade will remain closed Friday. Corn futures are lower in light trade. May corn futures are 1 1/4 cent lower. Stock markets are lower in light trade. Dow Jones is 14 points lower with Nasdaq down 6 points.

LIVE CATTLE:

Morning trade in live cattle futures have bounced higher and lower in a narrow to moderate range. The firming market shifts early in the week is creating some great opportunities traders to adjust nearby positions as they take profits due to limited trade volume.

Underlying firmness is seen in deferred futures trade with late 2019 and early 2020 contracts trading steady to moderately higher. The focus on higher cash trade starting to trickle into the market is expected to limit overall losses, but may not create significant buyer interest.

Light cash cattle trade is starting to develop in Texas at $126 per cwt. This is $2 per cwt higher than last week. This is the fourth-consecutive week that cash cattle trade started to develop on Wednesday.

It is uncertain just how much additional trade will be seen through the day, but both sides are likely to try to wrap things up earlier than later, getting business done before Good Friday.

Limited bids in other areas are seen at $126 to $127 live, with no dressed bids yet developing. Asking prices are holding at $130 live and $208 dressed.

Boxed Beef cut-outs at midday are mixed, $1.10 lower (select) and up $0.55 per cwt (choice) with active movement of 108 total loads reported (63 loads of choice cuts, 13 loads of select cuts, 8 loads of trimmings, 24 loads of ground beef).

FEEDER CATTLE:

Light trade is seen in all cattle futures with prices hovering in a mixed range from 37 cents lower to 27 cents higher. Firm early-week buyer activity seen in all cattle markets is allowing for nearby contracts to adjust positions in front of the extended holiday weekend as overall volume is expected to remain sluggish over the next couple of days.

Futures trade will remain closed Friday, in observance of Good Friday.

LEAN HOGS:

Wide price swings seen through the morning seem to have cooled at midday with prices hovering in a moderately but still mixed trading range. June and July futures continue to shift lower with prices 7 to 35 cents lower, but a long ways from the $2 per cwt losses seen during early trade.

Underlying follow through buyer support continues to develop in deferred contracts with prices in late 2019 and early 2020 leading the charge. This adds even more uncertainty as most of this buying is based on the long-term demand coming from China as they fill their need for pork.

Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.07 at $77.31 per cwt with the range from $70.00 to $80.00, on 4,740 head reported sold.

Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report.

Pork values surged higher in limited volume. Pork cutouts added $1.89 per cwt at $88.42 per cwt with 152 loads traded. Lean hog index for 4/15 is $79.84 up 0.27, with a projected two-day index is $80.24 up 0.40.

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