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DTN Midday Livestock Comments          04/02 12:23

   Livestock Futures Continue Lower Thursday

   Sharp losses have hit expanded trading limits in several feeder cattle and 
lean hog futures contracts. The underlying bearishness through the complex 
continues to build as concerns grow about the ability to sustain meat demand in 
the near future. 

By Rick Kment
DTN Analyst

General Comments

   Sharp losses have swiftly and aggressively moved into all livestock trade, 
which is causing many contracts to hit expanded trading limits. The uncertainty 
through the complex continues to focus on the concern that meat prices may 
continue to erode as demand uncertainty is developing. May corn is up 1/4 cents 
per bushel and May soybean meal is down $4.70. The Dow Jones Industrial Average 
is up 240.94 points and NASDAQ is up 68.91 points. 


   Sharp losses have quickly developed through the entire live cattle complex 
with pressure increasing as the day progresses. This has pushed April futures 
to the expanded trading limit, causing increased underlying concerns as several 
contracts have moved to new lows. April live cattle contracts are down $4.50 at 
$92.82, June live cattle contracts are down $3.87 at $83.60 and August live 
cattle contracts are down $3.50 at $85.60. There is expected to be increased 
underlying pressure through the entire cattle complex as the support seen in 
energy and financial markets has been unable to calm overall fears that 
consumer demand for beef may continue to erode over the near future. 

   Cash cattle activity remains at a standstill with packer interest quiet 
given the strong pressure in futures trade and further erosion in beef values. 
Asking prices remain at $114 to $115 per cwt live in the South and $183 and 
higher dressed across the North. It is possible that additional trade may be 
delayed until sometime Friday given the overall lack of interest so far 
Thursday. Both sides are looking for increased underlying stability over the 
coming days before actively stepping into the market.

   Boxed beef prices are lower: choice down $1.62 ($233.55) and select down 
$1.07 ($224.06) with a movement of 55 loads (24.67 loads of choice, 8.19 loads 
of select, 16.79 loads of trim and 5.84 loads of ground beef). 


   Sharp losses have continued to hold through the entire complex with 
expanding trading limits. This may add increase pressure through the end of the 
week. April feeders are down $5.42 at $112.00, May feeders are down $6.30 at 
$112.15 and August feeders are down $6.75 at $117.65. The underlying pressure 
in all cattle trade is expected to continue to put pressure on cash feeder 
cattle sales through the week. 


   Nearby lean hog futures are locked in expanded trading limits Thursday 
concerning widespread pressure expected to continue in pork values. Even though 
moderate sales of pork were reported to China in the morning export sales 
report, the focus on uncertain demand support from domestic and export markets 
combined with still aggressive pork production levels through most of the 
summer has lean hog trade setting new contract lows Thursday morning. 

   The projected lean hog index for 4/1/2020 is down $1.38 at $63.08 and the 
actual index for 3/31/2020 is down $0.69 at $64.46. Hog prices are higher on 
the National Direct Morning Hog Report, up $0.05 with a weighted average of 
$48.42, ranging from $45.00 to $50.50 on 2,146 head sold and a five-day rolling 
average of $54.67. Pork cutouts totaled 210.18 loads with 186.41 loads of pork 
cuts and 23.77 loads of trim. Pork cutout values: down $1.95, $63.09. 


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