Livestock Futures Commentary

Cattle Futures

Cattle futures turned lower and didn’t let up, finishing the day locked at the expanded limit. Live cattle remain in expanded limits, 4.50. Feeder cattle are in expanded limits 6.75. Cash cattle started to pick up yesterday, the bulk coming in near 112. Export sales came in at 18,200 metric tons, up 26% from last week and 10% above the 4-week average. The coronavirus continues to spread and that has led to employees at plants catching it. Reduced capacity has been a concern we’ve been talking about for several weeks as it was the only rationale for futures to be where they are at (a futures market, not a today market). With that said, does that mean April futures deserve to be trading at 97? No, we don’t think so, but that brings us back to the old unfortunate market saying: the market can remain irrational longer than most can remain solvent. Technical levels remain meaningless, anyone telling you otherwise might be a caution flag.

Lean Hogs Futures

Lean hog futures dropped like a rock yesterday, finishing limit down, giving us expanded limits of 4.50 today. Early indications are for another blood bath. Export sales this morning came in at 38,200 metric tons, down 1% from last week but 88% higher than the 4-week average.

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