Following the focus on the nearly $2 trillion relief package through the first half of the week, livestock and outside markets seem to be getting back to basics as concerns of longer-term demand erosion may lead to a pullback from recent gains.
Cattle: Higher Futures: Mixed Live Equiv $165.92 -0.98*
Hogs: Higher Futures: Lower Lean Equiv $ 83.88 -3.02**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cash cattle activity made great strides Wednesday with light-to-moderate trade developing across most areas of cash cattle country. Cash prices appear to be settling into a range that may contain the majority of activity through the end of the week.
Southern live business is at mostly $120 per cwt, $10 higher than last week’s price levels, while Northern dressed trade is at $190 per cwt. This is a $17 per cwt rally from last week’s weighted average, and will likely add additional support to the overall market through the rest of the week.
Even with additional trade developing through the end of the week, it is uncertain if price levels will deviate from current ranges, which could limit additional short-term support the rest of the week. Futures trade is expected mixed to mostly lower.
The ability for April live cattle futures to gains Wednesday despite pressure in all other contracts continues to focus on traders rolling contracts to the June contracts, which are trading at a significant discount ($12 per cwt) to the spot contract.
There is growing concern about longer-term meat demand and the current retail support, especially in the ground beef market, sustaining the current beef market support. Thursday slaughter is expected at 122,000 head.