Even though there is developing hope that overnight support in stock prices will spark much needed stability and buyer interest across livestock trade, the bearish sediment last week may firmly hold prices during early-week trade.
Cattle: Steady to Lower Futures: Lower Live Equiv $149.43 -2.56*
Hogs: Lower Futures: Lower Lean Equiv $ 62.29 -1.81**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
The light cash cattle trade last week is creating questions about whether packers will continue to pull back on production levels in the upcoming weeks as increased virus cases continue in the country. The announcement that workers are reported testing positive in many types of manufacturing and processing plants across the country has started to added uncertainty to overall beef production levels.
With cases of coronavirus reported at the JBS beef plant in Grand Island, Nebraska, there is still no report that production levels have changed going into the week, but the temporary closure of the company’s plant in Pennsylvania is creating uncertainty in the complex.
It is possible that packers will enter the week following limited trade last week, looking forward and remaining short-bought going through the early part of April. With the Easter weekend approaching and production levels limited, it is likely that packers are facing another week of scaled-back production.
Bids and asking prices may not develop until midweek or later, which may limit cash market support over the next couple of days.
Futures trade is expected mostly lower with firm pressure developing late last week, keeping the entire market weak. Live cattle futures will have the access to expanded trading limits Monday following April contracts closing limit lower Friday.
Feeder cattle trade moves back to normal trading limits of $4.50 per cwt Monday morning. Monday slaughter is expected at 118,000 head.